Thinking twice when handing your mortgage over to a bank adviser
Great story below of a recent Scotiabank advisor messing up a deal so bad that it ended up disqualifying a buyer from getting a special at 3.69% insured mortgage when market rates are 4.45%.
Bank advisors mess up all the time and I hear about it all the time. Maybe 15% of our deals get to us from bank mess ups.
In the story cut and paste below these buyers just would have ended up with a a higher rate but their deal wold still work… this one caused a 1 year delay.
Let me tell you a mortgage story…
We had a customer that we helped sheppard past 3 or 4 fiery hoops getting his mortgage ready for approval with a bumpy past we were smoothing over. Then 1 day he calls and says a met a bank mortgage rep at a gas station, that bank rep “guaranteed” him getting approved so our customer applied and … surprise – worse than a decline, CMHC declined him.
CMHC was the only lender that would do his specific deal, for the mess he was in, and/ but CMHC NEVER forgets – anything. All the insurers retain all data for ever. So he now had to wait another 12 months to get insurer approval. The delay in the end was 12 additional months that he had to wait before he could buy.
So … Think twice before handing over your mortgage to a bank adviser
Mark Herman, Best mortgage broker in Calgary Alberta for new home buyers.
Opinion: Think twice before handing your mortgage to a bank adviser – CMT News
Written by Ross Taylor, Mortgage Strategies, Opinion,
Let me tell you a story.
Recently, a major chartered bank ran a very competitive promotion: 3-year fixed rates at 3.69% for insured files and 3.99% for conventional files. Needless to say, these rates were popular, business was booming, both for the bank and for brokers working with them.
We had pre-approved a young couple earlier in the year, but when it came time to seek approval on a home they had made a successful offer on, they first went directly to their local branch to withdraw funds from their First Home Savings Account (FHSA).
When a branch adviser steps in
During that visit, the branch financial adviser offered to handle their mortgage as well. He convinced them there was no need to come back to our team, he had it all under control.
They also explored options at another bank, but the rates they were offered were mediocre. Our promo was still the best rate in town.
The deal gets declined, and there’s no second chance
But here’s the twist. After the financial adviser submitted their deal, it was declined. He escalated the deal to senior management, but again was given a firm no.
When they came back to us and told me the news, I was shocked. I couldn’t understand why they were declined. On paper, this was a strong file. Solid income, great credit, and their debt service ratios were within reasonable bounds.
Misinterpreting income cost them the deal
I asked if they were told why they were turned down, and they said, “because our debt service ratios were over the 39/44 limit.”
Now, their pay stubs were a bit complicated, I’ll give you that. But we had their T4s, and I could easily make a case for either using a two-year average or taking their current full-time salary. Both would have worked. You just had to know how to interpret the documentation properly.
I contacted our Business Relationship Manager at the bank and asked if I could re-submit the file. After all, it had been declined, and I felt confident we could get it approved with the correct interpretation of income. But the answer was a firm no.
Why bank policy closed the door
The bank’s position was that I wouldn’t want another broker or branch employee taking one of our approved files and trying to submit it again. And while I understand the sentiment, this wasn’t the same thing. This wasn’t poaching a win, it was salvaging a decline.
But rules are rules, and because the file had already been escalated and declined by the branch, there was no path forward for me to resubmit it — even if I knew how to fix it.
What’s the lesson here? Be careful who you trust with your mortgage
This story isn’t about one bank being better than another. It’s about understanding that not all mortgage advisers are created equal. When you walk into a branch, you’re often speaking to a generalist. They might have good intentions, but they don’t always have the same level of mortgage-specific training or experience as a full-time mortgage broker.
And the consequences of that can be enormous. In this case, the clients lost out on a great rate and had to start over, simply because it seems their adviser didn’t fully understand how to package their income. And once the file was declined, there was likely no second chance.
The bottom line
Mortgages are complex, especially if your income is even slightly non-standard. Getting declined not only wastes time, it can actually prevent you from accessing the best deals, even if you’re fully qualified. Before you hand over your file to someone behind a desk at your local branch, ask yourself: do they really specialize in mortgages?
Because once a file is escalated and declined at the bank level, it may close off options you didn’t even know you had.
Make sure you’re putting the biggest financial transaction of your life in the right hands.
Reverse Mortgage Specials: October 2025
The reverse mortgage market is surging yet remains undeserved by brokers that dabble in this product.
We have been doing Reverse Mortgages since 2005, and also did the largest Reverse Mortgage ever at the time (in 2014) for $720,000!!
With millions of Canadians approaching retirement and facing a savings shortfall, now’s the time to look into REVERSE MORTGAGE Options.
Mortgage Mark Herman, expert in Canadian Reverse Mortgages
The Numbers
3M
Canadian households retiring in the next 10 years
$1M
What most Canadians believe they need to retire
$272K
Average retirement savings for Canadians 65+
That’s a $728K gap—and reverse mortgages can help close it.
Right now 2 of the 3 big lenders have a special on.
- Available in AB, BC, ON, QC
- We’ll beat any posted rate for comparable reverse mortgages
HIGHLIGHTS of these lenders and their reverse mortgages:
- Tax-free cash for:
- Paying off an existing mortgage
- Debt consolidation
- Health care & renovations
- Living inheritance & gifts
- No monthly payments required
- No impact on federal retirement benefits
- 100% home ownership retained⁶
- Preserve investments & legacy while aging in place
Ready to start the conversation?
Reach out today to discover how reverse mortgages can grow your business—and help your clients thrive.
Reach me direct at 403- six81- 437six
I answer from 9-9 x 365.
#1 Mortgage Rate SPECIAL in Canada ⚡
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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 Mortgage with American Income, 2025
Yes, that headline is true!!
August 15, 2025
We finally have an “A lender” in the Canadian mortgage broker space that will allow a buyer’s USA/ American income to be used.
Quick summary of the details.
- 30% down
- 80% of USA salary to be used, income based on USA tax docs
- Almost any standard residential property in Canada
- “A lender,” at A rates, no lender fee, no broker fee, underwritten the same as all Canadian mortgages
- No funny business here. This is a normal mortgage, that you would want. The same as what expect from any of the Big-6 banks in Canada.
For more data or to ask about a deal, contact Mortgage Mark Herman, on his cell phone. He usually answers his own phone; from 9 am to 9 pm MST daily.
Data points below summarize key criteria and parameters for an “A-lender” in the Canadian mortgage broker channel that accepts US income.
Borrower Eligibility
- Citizenship: any (US, Canadian, or other)
- Canadian residency: no minimum length of stay required
- Tax history: two consecutive years of US tax filings (no CRA filings needed – its true!)
Income Documentation
- W-2 forms (equivalent to Canadian T4 slips)
- IRS Form 1040 (equivalent to Canadian T1 returns)
- US Tax Return Transcripts or Notices of Assessment (NOA – Notice of Assessment)
- All documents must cover the most recent two-year period
Income & Loan Parameters
- Income recognized: up to 80% of gross US salary
- Income types accepted: salary only (sorry, the bank can’t use fee-for-service, or self-employed/ BFS income)
- Maximum loan-to-value ratio (LTV): 70%, means 30% down payment
- Credit underwriting conforms to Canadian mortgage regulations
Property Types
- Primary residence
- 2nd home / Secondary or vacation home and even…
- Rental or investment property
Notes
- No requirement for employer size, industry, or Canadian work history
- Simplified process: bypass CRA income filings entirely
- Ideal for US-based clients relocating, investing, or holding dual residences
We used to run into a few of these deals ever year, and now we see one every month so we found a lender that can do this business for our realtor partners.
The buyers only need 30% down, and the bank will use 80% of their USA salary as the income.
Mark Herman, top Calgary Alberta and Vancouver Island mortgage broker
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.
Summer is here!
Our 55+ clients are thinking about ways to refresh their homes.
Whether it’s for comfort, safety, or curb appeal, renovations can get pricey and the CHIP reverse mortgage can really help out.
Mortgage Mark Herman, CHIP and Reverse Mortgage specialist, here to help the 55+ home owners.
The CHIP Reverse Mortgage by HomeEquity Bank can help you access the funds you need—tax-free and with no monthly mortgage payments required.
Here are just a few popular spring projects our recent customers have been planning:
- Retrofitting their home to support aging in place
- Resealing windows and doors for better energy efficiency
- Landscaping makeovers to enhance privacy and beauty
- Adding an outdoor kitchen and seating area for entertaining
- Repaving the driveway to boost curb appeal
With the CHIP Reverse Mortgage, you can unlock up to 55% of your home’s equity, giving you the freedom to renovate now and enjoy the results for years to come—all without dipping into your retirement savings.
Looking for tips on how use the CHIP in renovations? Call or email me, I’d be happy to help!
GST Rebate for 1st Time Home Buyers
We have had lots of questions about this proram.
The legislation has been tabled, but is not done yet. As of today, and it is for contracts written May 27, 2025 or later.
Updates as they come in.
We have a 4-plex buyer who is purchasing a newly constructed 4-plex in Calgary at $1,250,000. His rebate is about 60k – now that is now pretty substantial!
Mortgage Mark Herman, 1st time buyer and move up mortgage specialist in Calgary Alberta.
Bank of Canada Lowers Consumer Prime to 4.95%
The Bank of Canada lowers its benchmark interest rate to 2.75%
In the face of significant geopolitical tensions, the Bank of Canada announced today that it has lowered its policy interest rate by 25 basis points. This marks the seventh reduction since June of 2024.
Below, we summarize the Bank’s commentary.
Canadian Economic Performance and Housing
- Canada’s economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter
- This “growth path” is stronger than was expected when the Bank last reported in January 2025
- Past cuts to interest rates have boosted economic activity, particularly consumption and housing
- However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity
- Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments
- The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed
- The Canadian dollar is broadly unchanged against the US dollar but weaker against other currencies
Canadian Inflation and Outlook
- Inflation remains close to the Bank’s 2% target
- The temporary suspension of the GST/HST lowered some consumer prices, but January’s Consumer Price Index was “slightly firmer” than expected at 1.9%
- Inflation is expected to increase to about 2.5% in March with the end of the tax break
- The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation
- Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices
Canadian Labour Market
- Employment growth strengthened in November through January and the unemployment rate declined to 6.6%
- In February, job growth stalled
- While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market
- Meanwhile, wage growth has shown signs of moderation
Global Economic Performance, Bond Yields and the Canadian Dollar
- After a period of solid growth, the US economy looks to have slowed in recent months, but US inflation remains slightly above target
- Economic growth in the euro zone was modest in late 2024
- China’s economy has posted strong gains, supported by government policies
- Equity prices have fallen and bond yields have eased on market expectations of weaker North American growth
- Oil prices have been volatile and are trading below the assumptions in the Bank’s January Monetary Policy Report
Rationale for a rate cut
While the Bank offered that economic growth came in stronger than it expected, the pervasive uncertainty created by continuously changing US tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest. Against this background, and with inflation close to the 2% target, the Bank decided to reduce its policy rate by 25 basis points.
Outlook
The Bank notes that the Canadian economy entered 2025 “in a solid position,” with inflation close to its 2% target and “robust” GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.
Final comments
The Bank noted that monetary policy “cannot offset the impacts of a trade war.” What monetary policy “can and must do” is ensure that higher prices do not lead to ongoing inflation.
The Bank said it will carefully assess: i) the timing and strength of both the downward pressures on inflation from a weaker economy and ii) the upward pressures on inflation from higher costs. It will also closely monitor inflation expectations.
It ended its statement by saying it is committed to maintaining price stability for Canadians.
More scheduled BoC news
The Bank is scheduled to make its third policy interest rate decision of 2025 on April 16th.