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How to Buy a Home in Alberta with Poly B Plumbing
Are you trying/ looking to buy a home in Alberta with Poly B plumbing?
We just completed financing on a purchase in Calgary with Poly-B throughout the home AND we managed to INCLUDE the cost to replace it it all into the mortgage too!!
Mortgage Mark Herman, best Calgary Alberta mortgage broker near me.
Action Steps
Please reach out if you would like to talk about:
- The contact for the home/fire insurance company that INCLUDES Poly B, with full replacement value of the home, as required
- Buying a home / getting a mortgage that needs Poly B replacement.
- Adding/ including the cost of a renovation into your mortgage on purchase, or on renewal, or at any time.
Summary
Homes with Poly B are priced lower accordingly due to the difficulty of getting home/fire insurance BUT there is some “good uplift to the value” if it can be fixed.
It was a rough ride but now that we have all the pieces in place, the next ones will be easier.
2 extra moving parts to a normal deal:
- Getting the quote for the replacement of the Poly B for the entire home, from a company that will do it.
- Hardest part was getting the home/fire insurance to cover 100% of the home replacement cost.
Below is the wording in the mortgage approval that came back to us on what it had to include from the mortgage lender:
- *Copy of home insurance policy – need receipt of valid fire insurance particulars for the subject property.
- **Coverage must include full replacement cost of Poly B for single family dwelling
- *** Require full disclosure to insurance provider that home contains Poly B Plumbing and endorsement.
Tricks
Sometimes the insurance companies will only cover it for 30 – 60- or 90 days; until the work is completed. Then they go back to a normal policy at normal rates. If that is the case then the bank adds this clause:
- It must be noted that Poly B will be replaced within “x” amount of days.
- (This is usually whatever the contractors timeline to having the work done is the “x-days”)
Adding the cost of the reno into the mortgage – our specialty for the last 20 years.
We have a fantastic “Perfect Home Mortgage” that allows you to add up to $40,000 easily, or with some difficulty (more questions and paperwork) up to $100,000 in renos to the mortgage.
Essentially, 1 quote is needed for the work being done, then bank send the funds for the home, and the reno to the lawyer. When the work is 100.000% complete we order an inspection of the work, and the the lawyer pays the company for the work. this usually has to be completed in 90 days.
Below is the wording from the bank for this:
- Please ensure the client knows there will be a holdback at the lawyers for the full cost of the Poly B improvement.
- It is the buyer’s responsibility to make arrangements with the contractor to either pay them direct or have lawyer directed funds once completed.
- It is a condition that an appraiser inspects and confirms the work done prior to funds being released and the cost of the inspection is paid by buyer.
ENDING…
Is this for you? Are you ready for the ride?
* Poly B, or polybutylene, is a type of plastic plumbing pipe that was commonly used in residential plumbing systems from the mid-1970s to the mid-1990s. It was initially favored for its low cost and ease of installation, but it has since been identified as a material prone to leaks and failures.
Using cryptocurrency to buy a home in Canada: 2025
We have been getting lots of customers asking this question with the recent rise of crypto values.
Below are ALL the details I have collected: from tax implications to AML compliance, what buyers need to know before turning digital gold into a home.
I have bitcoins for my down payment on my home!
Many Canadians now have significant Bitcoin, Ethereum or other crypto and want to use that for the down payment in a home purchase.
However, turning crypto into a viable down payment, or leveraging it as collateral, isn’t nearly as simple as it sounds.
Mortgage Mark Herman, Best Calgary Alberta mortgage broker for crypto mortgage brokers and first time home buyers
First, what is a crypto mortgage?
Crypto mortgages typically fall into one of two categories:
- Crypto-funded mortgage – the way that actually works: You sell your crypto, convert it to Canadian dollars, and use those funds as your down payment. This way also comes with some with tax consequences on the sale – but hey, your crypto may be up 15000%, and the capital gains tax is only on the amount you cash in, and it is 50% of the profit. SEE THE MATH ON THIS at the bottom.
- Crypto-backed mortgage – what everyone is asking for: You pledge your crypto as collateral without selling it. This probably helps avoid triggering capital gains tax, but requires a lender capable of assessing and managing that risk. We have not found this route to work due to enormous anti-money-laundering laws that realtors, banks, and brokers have to follow.
Version 1: Using your crypto as a mortgage down payment
This is the way that works, and the easiest way to use your crypto is to cash it in/ convert to cash, and move the funds into a Canadian bank account to “seed” or “season” for 90 days.
- This is not really needed with most other assets and we have tried so many ways to get the lenders to accept the funds held in a crypto trading platform (like Binance, NDAX or similar, but they always sound the alarm right here, send the file to “the risk desk” and then it is a battle the entire rest of the way.
Why do I need to cash it in and leave it in the bank for 90 days? It’s AML!
The “kink in the system” is that we have to show a 90 day history for the source of all down payment funds for AML – anti money laundering law compliance. Normally banks are fine with funds sitting in Wealth simple or any trading account but NOT for crypto. After getting “all the NO’s” we found this is the way to go.
What about – buying with cash and refinancing/ getting a mortgage on it later?
- When you do this in the 1st year, the banks still need to re-verify the original down payment for the original purchase so this will still be tough to do.
- And refinance rates are higher than purchase rates, and you would then also be re-registering the mortgage and registration has shot up to about $2000, from $200 over the last year in Alberta.
Version 2: which we have NOT found to work – is leveraging your crypto and pledging it without a sale.
If you want to access liquidity without selling your crypto, a crypto-backed loan is another option and here is how it is supposed to work to avoid the capital gains event.
- If this has too many moving parts, then selling your crypto and putting it into the bank for 90 days is the way to go.
- Deposit crypto as collateral
You transfer your crypto to a platform, where it is held in a secure wallet or smart contract. Platforms such as YouHodler and Ledn support this model.
- Loan-to-value (LTV) ratio
You can typically borrow between 30% and 70% of your crypto’s value. For example, pledging $10,000 worth of Bitcoin may get you a $5,000 loan.
- Disbursement
Loans are issued in fiat (e.g., CAD, USD) or stablecoins. Most do not require a credit check and can be approved quickly.
- Repayment and interest
Terms vary. Some platforms offer flexible repayment options; others require fixed schedules. Once the loan and interest are repaid, your crypto is returned.
- Liquidation risk
If the value of your crypto drops and your LTV exceeds a certain threshold, you may be required to add collateral. Otherwise, your crypto may be liquidated.
- No taxable event
Since you are borrowing, not selling, there is no capital gains tax event. This can be beneficial from a tax-planning perspective.
WHAT ALSO WORKS …
A simpler, safer alternative: using crypto ETFs for mortgage planning
For a more straightforward path, consider using crypto ETFs instead of direct crypto holdings. ETFs allow you to gain exposure to digital assets without managing wallets, keys, or exchange accounts.
Held through mainstream brokerages, including in TFSAs and RRSPs, crypto ETFs are easier for lenders to understand and verify, avoiding the friction that often comes with direct crypto assets.
Leading crypto ETFs in Canada
These are some of the top crypto ETFs available to Canadian investors:
- BTCC (Purpose Bitcoin ETF): The first Canadian Bitcoin ETF, with CAD and USD options and a carbon-neutral version
- BTCQ (3iQ CoinShares Bitcoin ETF): Physically-backed BTC, held in cold storage
- FBTC (Fidelity Advantage Bitcoin ETF): Designed for registered accounts
- ETHH and ETHX (Purpose and CI Galaxy Ethereum ETFs): Offer direct ETH exposure, with or without staking
- IBIT (iShares Bitcoin ETF): Managed by BlackRock, a major global asset manager
Several ETFs now include additional exposure to AI stocks or newer crypto assets like Solana, expanding diversification options within this space.
Naturally, this is our experience and this should NOT be taken as investment advice. Ask your licensed financial adviser for their opinion before proceeding please.
SUMMARY
Can I use crypto as a down payment?
Yes, but there are strict conditions:
- You must convert the crypto to Canadian dollars
- Maintain a documented paper trail of the sale and deposit
- Be prepared to explain the origin of your funds for AML compliance
Many lenders will still be hesitant. Working with a mortgage broker familiar with these requirements and a lender that understands crypto is essential.
Is it legal and safe in Canada?
Yes, but regulatory guidance is evolving.
Lenders must comply with OSFI and FINTRAC standards, which include thorough AML and source-of-funds verification.
OSFI is expected to implement new digital asset rules in 2025, which may influence how Canadian financial institutions handle crypto-collateralized products.
Key risks to consider
- Price volatility: A drop in crypto value can lead to margin calls or liquidation
- Lender restrictions: Many banks still reject crypto-related funds
- Platform risk: Some crypto lenders have gone bankrupt
- No deposit insurance: Crypto held as collateral is not insured by CDIC
- Compliance complexity: Documentation, tax reporting, and regulatory scrutiny can be significant
How does CRA treat crypto in mortgage scenarios?
Under CRA guidelines, cryptocurrency is treated as a commodity.
Selling it to fund a down payment is a taxable event, and any capital gains must be reported.
However, borrowing against your crypto is not a disposition and does not trigger capital gains taxes, at least under current rules. Regardless, thorough documentation is critical.
Crypto-backed mortgages and crypto-collateralized loans offer new possibilities, but they’re not ideal for everyone. If you’re a crypto holder considering homeownership in Canada:
- Convert your crypto to Canadian dollars early, and let it seed for at least 90 days
- Alternatively, accumulate your crypto wealth in Exchange Traded Funds
- Document everything: sales, transfers, deposits, and sources of funds
- Work with professionals who understand both traditional lending and crypto
- Be ready to meet rigorous compliance and verification requirements
Canada’s mortgage landscape is still catching up to the digital asset world. Planning ahead is key to avoiding delays or declined applications.
Further reading and sources
Taxable Capital Gains on Bitcoin in Canada
When you dispose of Bitcoin (for example, selling or “cashing in”), the Canada Revenue Agency treats it as a commodity. If your transaction is considered a capital disposition, only 50% of the gain is taxable.
How It’s Calculated
- Adjusted Cost Base (ACB): The original purchase price (in CAD), plus any fees.
- Proceeds of Disposition: Fair market value (in CAD) on the date you sell.
- Capital Gain:
Gain=Proceeds−ACB−Disposal Fees\text{Gain} = \text{Proceeds} – \text{ACB} – \text{Disposal Fees}
- Taxable Capital Gain:
For example, if you bought Bitcoin for $10,000 CAD and later sold it for $15,000 CAD (with $100 fees), your gain is $15,000 – $10,000 – $100 = $4,900. You report half—$2,450—as taxable income.
Tax Payable
- The $2,450 is added to your total income for the year.
- The actual tax you owe equals your marginal tax rate multiplied by the taxable gain.
Municipal, provincial and federal rates all apply, so total tax varies by province and your income bracket.
Reporting & Recordkeeping
- Report on Schedule 3 (Capital Gains) of your T1 return.
- Keep detailed records: transaction dates, CAD valuations, fees and wallet addresses.
- Use reliable crypto-tax software or a professional to ensure accuracy.
Special Considerations
- If CRA deems your activity a business (frequent trading, mining, or providing services), 100% of profits may be taxed as business income.
- Capital losses can offset gains—claim them on Schedule 3 to reduce your taxable gain.
Beyond capital gains, remember that receiving Bitcoin as income (mining rewards, staking, payments) is taxed at 100% of its fair market value on receipt. Always consult a tax professional for personalized advice
Canadian Residential Market Update
Fixed rates are slowly rising due to Trump’s inflationary policies and we see that continuing until tariffs are sorted out.In the mean time, now is a great time to buy as inventory is high and rates are only .4% above where they were before Covid.Mortgage Mark Herman, Top Calgary mortgage broker specializing in 1st time buyers.
Probably the end of Mortgage Rate Reductions for Canada
Expert opinions on Bank of Canada interest rate cuts are shifting. A growing number of market watchers are backing away from their predictions of two more reductions this year. Several are now saying the Bank has likely reached the end of the current trimming cycle.
Back in April we said that Prime is probably going to stay where it is now; discounting the expected 4 more reduction to 0.
that looks to have come true.
5-year fixed is the way to go to side-step all the world’s recent happenings .
Mortgage Mark Herman, best Calgary mortgage broker near me.
The central bank held its trend-setting Policy Rate at 2.75% for a second time in its decision on June 4. Since then, inflation numbers and Gross Domestic Product readings have given the BoC reasonable grounds to stand pat.
Statistics Canada’s latest figures for GDP show it declined by 0.1% in April compared to March. Much of that decline was led by the manufacturing sector, which is falling victim to U.S. tariffs and trade uncertainty. A similar reduction is forecast for May. While many economists admit the slowdown shows the economy is softening, they say it is not on the verge of collapse. GDP is 1.3% higher that it was a year earlier.
The other key factor in the Bank’s rate decisions, inflation, held steady at 1.7% in May. That headline number is actually below the Bank’s target of 2.0% and would normally suggest there is room for a further rate cut. However, that is a little deceiving.
Headline inflation (aka the Consumer Price Index) continued to be skewed by the elimination of the consumer carbon tax. As well, core inflation, which is the BoC’s preferred measure, remains stuck at 3.0%, which is the high end of the Bank’s desired inflation range.
The Bank finds itself trying to balance economic growth against the risk of rising inflation. The Bank’s next interest rate announcement is set for July 30.
RBC Mortgage Payout Penalties Skyrocket in 2025
Details of the recent actions RBC has taken to INCREASE THE PAYOUT PENALTY for their own customers.It shows that Big-6 Banks are not your best -mortgage- friend. Brokers Are!Mortgage Mark Herman, Top Calgary Alberta mortgage broker
If you’re seeking a textbook case of banks giving consumers the short end of the stick, look no further.
The nation’s biggest mortgage lender, RBC, just slashed its posted rates.
“RBC’s move is the biggest move to increase penalties (IRDs) since its posted rates peaked on September 20, 2023,” says Matt Imhoff, founder of Prepayment Penalty Mentor.
For those fluent in the dark arts of interest rate differential (IRD) charges, this spells disaster for anyone daring to escape their RBC mortgage shackles early. Here’s precisely how grim it gets…
This is what RBC did to its posted rates today (Friday):
- 5 Year: -30 bps
- 4 Year: -25 bps
- 3 Year: -35 bps
- 2 Year: -85 bps
- 1 Year: -55 bps
- 6 Month: -55 bps
Anyone attempting to break a 2, 5, 7, or 10-year RBC mortgage now is potentially in for a world of penalty hurt due to these changes.
By way of example, if you’re an originator poaching a $500,000 RBC 4.4% 3-year fixed originated in July 2024, that client would be staring down a penalty of approximately $17,500, Imhoff says.
That’s up almost $10,000 in one day—simply because RBC slashed the comparison rate (its 2-year posted rate in this case).
In other words, the 255 bps “discount” from posted that this customer got in 2024 is now like a financial boomerang, coming back to hit them hard Imhoff says.
“This IRD is significantly higher than it should be, and that’s the risk of going with a bank where posted rates are elevated.”
In the above example, the client’s only option to avoid more than a three-month interest penalty would be to ride out their RBC term until they have just 1.41 years remaining (per the chart below).
To virtually ensure a three-month interest penalty, a customer needs to be just eight months shy of their mortgage’s maturity, as illustrated in the RBC table below.
Watch out for TD customers
As Matt’s table below shows, TD’s posted rates are well above where they typically reside relative to bond yields. As a result, “I believe this sets the stage for what TD will inevitably do,” he says.
In cases where a client needs to refi, he adds that the risk of imminent posted rate changes at TD makes it too risky for brokers to get the deal approved elsewhere and then request discharge from TD. Time is money in this case.
“If a broker tries to get a payout order from TD today, TD can wait up to five business days,” Imhoff notes, adding that during that time, the penalty can go up.
In the event that early discharge makes clear sense, he says, “I am advising brokers to have their TD clients go to the branch, break the mortgage, pay the penalty while it is still on sale, and switch into an open.”
PPM has a great table (below) that also shows which terms at which banks are most prone to IRD penalties. Terms in red face IRD charges now, based on the assumptions the user enters. Terms in orange are at risk of being charged IRDs on the next posted rate drop.
It pays to know in advance when penalties make a refinance uneconomical. “There are brokers working on deals today that will never fund—all that wasted time, effort, money, just to get a payout that kills the deal.”
Mortgage renewal: Now switch lenders without re-taking the stress test
Great news as a few leading banks, soon to be followed by the rest of the pack, have DITCHED THE STRESS TEST for RENEWALS.
This means if you have extra debts or a debt level higher than when you got your mortgage, some banks can now overlook that and still get you the best rates.
there is now an option if you were concerned about renewing due to higher debt loads or if your financial situatoin has changed since you bought your home.
Technically, this means most conventional switch (more than 20% down payment) customers no longer need to prove they can afford a payment based on the minimum qualifying rate (MQR). That rate is at least 2% higher (or 200 bps where 100 bps = 1.oo%) than actual rates.
This news is just out today for BOTH High ratio/ insured (meaning you bought with less than 20% down payment) AND Conventional (meaning 20% or more down payment)
Note, however, that property values for insurable borrowers must be under $1 million unless grandfathered.
To find out more please call (best) 403-681-4376 or email to reach out for more data.
This is a BIG DEAL. For renewals we always had to do the math to ensure you could change banks and many with higher debts than they bought with were not able to change banks. The banks knew this and offered them renewal rates that were way to high, but the home owners had no option. Now you do!
20 year mortgage expert, Mortgage Mark Herman
YES!
Canada’s New Capital Gains Tax Rules and Mortgages
Next pressing issue after 25% tariffs is the Canadian Federal Government’s decision to delay the implementation of its new capital gains tax rules until 2026.
In the 2024 budget Ottawa was set to increase the capital gains inclusion rate – the portion of gains that is taxable – from 50% to 66.7% for individuals earning over $250,000 in annual capital gains, as well as for corporations and most types of trusts.
- That plan has now been pushed back to January 1, 2026.
- For average Canadians this would mainly affect those selling a second residence, such as a cottage.
- The delay could see some properties come onto the market with owners hoping to take advantage of the tax saving.
The government caused panic-selling of Cottage Country Cabins in Ontario, and has now paused the capital gains tax.
We hope this pause will allow a normal sales cycle to take place.
Mortgage Mark Herman, Calgary Alberta mortgage broker near me
Bank of Canada lowers benchmark interest rate to 3%
The Bank of Canada opened its monetary policy playbook for 2025 with a 0.25% reduction in its overnight rate. The 6th since June of last year.
In issuing its January Monetary Policy Report, the Bank also noted that its projections are subject to “more-than-usual uncertainty” because of the rapidly evolving policy landscape, particularly the threat of trade tariffs by the new administration in the United States.
Variable rates win, but can you handle some possibly sleepless nights if Trump’s tariffs increase fixed rates as much as 3%?
(Click to see the link to the report showing this.)
If Canada does a full retaliation to Trump’s 25% tariffs our Canadian interest rates could go up by 3%; and if there is no retaliation at all, Canadian interest rates could go down by up to 3% as well!
Mortgage Mark Herman, 20+ years of mortgage experience with an MBA from a top school & Top Calgary Alberta Mortgage Broker
Below, we summarize the Bank’s commentary.
Canadian economic performance and housing
- Past interest rate reductions have started to boost the Canadian economy
- Recent strengthening in both consumption and housing activity is expected to continue
- Business investment, however, remains weak
- The outlook for exports is supported by new export capacity for oil and gas
Canadian inflation and outlook
- Inflation measured by the Consumer Price Index (CPI) remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products
- Shelter price inflation is still elevated but it is easing gradually, as expected
- A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggest that underlying inflation is close to 2%
- The Bank forecasts CPI inflation will be around the 2% target over the next two years
Canadian labour market
- Canada’s labour market remains soft, with the unemployment rate at 6.7% in December
- Job growth, however, has strengthened in recent months, after lagging growth in the labour force for more than a year
- Wage pressures, which have proven sticky, are showing some signs of easing
Global economic performance, bond yields and the Canadian dollar
- The global economy is expected to continue growing by about 3% over the next two years
- Growth in the United States has been revised upward, mainly due to stronger consumption
- Growth in the euro area is likely to be subdued as the region copes with competitiveness pressures
- In China, recent policy actions are boosting demand and supporting near-term growth, although structural challenges remain
- Since October, financial conditions have diverged across countries with bond yields rising in the US, supported by strong growth and more persistent inflation, and bond yields in Canada down slightly
- The Canadian dollar has depreciated materially against the US dollar, largely reflecting trade uncertainty and broader strength in the US currency
- Oil prices have been volatile and in recent weeks have been about $5 higher than was assumed in the Bank’s October Monetary Policy Report
Other comments
The Bank also announced its plan to complete the normalization of its balance sheet, which puts an end to quantitative tightening. The Bank said it will restart asset purchases in early March 2025, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
It also offered further rationale for today’s decisions by saying that with inflation around 2% and the economy in excess supply, the Bank’s Governing Council decided to reduce its policy rate. It also noted that cumulative reduction in the policy rate since last June is “substantial.” Lower interest rates are boosting household spending and, in the outlook it published (see below), the economy is expected to strengthen gradually and inflation to stay close to target.
Outlook
In today’s announcement, the Bank laid out its forecast for Canadian GDP growth to strengthen in 2025. However, it was quick to also point out that with slower population growth because of reduced immigration targets, both GDP and potential growth will be “more moderate” than what the Bank previously forecast in October 2024.
To put numbers on that forecast, the Bank now projects GDP will grow by 1.8% in both 2025 and 2026. As a result, excess supply in the Canadian economy is expected to be “gradually absorbed” over the Bank’s projection horizon.
Setting aside threatened US tariffs, the Bank reasons that the upside and downside risks in its outlook are “reasonably balanced.” However, it also acknowledged that a protracted trade conflict would most likely lead to weaker GDP and higher prices in Canada and test the resilience of Canada’s economy.
The Bank ended its statement with its usual refrain: it is committed to maintaining price stability for Canadians.
2025 will bring more BoC news
The Bank is scheduled to make its second policy interest rate decision of 2025 on March 12th. I will provide an executive summary immediately following that announcement.
New Canadian Mortgage Rules; Sept 2024
Great news from Ottawa today on the new rules for Canadian mortgages:
- An Increase to the Insured Mortgage Price Cap: The government will raise the price cap from $1 million to $1.5 million, reflecting the realities of today’s housing market. This change, effective December 15, 2024, will help more Canadians qualify for insured mortgages and make homeownership more attainable, especially for younger Canadians.
- Expanded Eligibility for 30-Year Amortizations: First-time homebuyers and all buyers of new builds will now be eligible for 30-year insured mortgage amortizations. This is a crucial step in reducing monthly mortgage payments and helping more Canadians, particularly Millennials and Gen Z, achieve the dream of owning a home.
- Increased Mortgage Competition: The strengthened Canadian Mortgage Charter now enables insured mortgage holders to switch lenders at renewal without being subject to another stress test. This will foster greater competition and ensure Canadians have access to the best mortgage deals.
All 3 of these changes will help New Buyers / 1st Time Buyers afford to get into a home of their own.
Most of our First Time Buyers need gifts or co-signing from parents to be able to buy. The 30 year amortization and increase of CMHC insurance will totally help.
Mortgage Mark Herman, Best top Calgary Alberta mortgage broker specializing in 1st time buyers for 20 years.