Fernanda Santos and Gustavo Pereira of London, Ont., knew the housing market was wildly overpriced in March 2022, but felt pressured to become owners, so they bought a three-bedroom home in the east end for $730,000.
“Everybody said to us you should buy as soon as you can — doesn’t matter if you like it or not, just buy and get into the market,” Santos, 34, recalled in an interview with Rebecca Zandbergen, host of CBC Radio’s London Morning.
The couple moved to Canada from Brazil in 2019 for a better life. Today, they’re sitting on a mortgage with a variable rate (currently at 5.6 per cent) on a house that has fallen in value by an estimated $150,000, and paying $4,400 a month — $1,600 more than they had anticipated.
“That’s not what we dreamed about,” said Santos. “It’s just been a nightmare for us.”
In an attempt to tackle inflation, the Bank of Canada has raised interest rates eight times since the start of 2022. The central bank’s rate is now at 4.5 per cent.
As well, housing prices have dropped considerably since the couple bought their home. In fact, sales in January were the lowest for that month since 2009, down 37.1 per cent compared with a year ago, the Canadian Real Estate Association (CREA) said this week.
How the books of Fernanda Santos and Gustavo Pereira look each month:
“They’re just going to raise the rates until they reach a point that they are comfortable with,” said Santos. “But they don’t think about all the people that they are impacting with that.”
Despite both having good jobs, with a combined annual salary of $140,000, Santos and Pereira are struggling to keep up. Both worked as engineers in Brazil. Santos is now a senior estimator with a construction company in London and Pereira is an engineer in training.
“It’s not only the mortgage,” said Santos. “We have property taxes. It’s a huge chunk every single month. We have insurance for the house, insurance for ourselves. So there is a lot of hidden costs.”
The couple are also paying $500 a month towards the cost of home renovations.
On the weekends, the couple’s work isn’t done. Both drive for UberEats and Instacart in an effort to offset their bills.
“When you have like 60 per cent of your full income going toward your mortgage, you pretty much don’t have anything left, plus we have to eat, right?” said Santos.
Santos and Pereira are also using their savings — money they diligently set aside for a rainy day — to buy their groceries.
Housing analyst John Pasalis, president and a broker at Toronto’s Realosophy Realty Inc., said the couple should go back to their lender (in this case, RMG Mortgages) to see if they can negotiate a lower payment.
One option may be to lengthen the amortization — the amount of time it takes to pay the mortgage off in full — which can come with smaller monthly payment options.
“I think people are reluctant to do that [negotiate], but they need to push,” said Pasalis, adding that lenders seem interested right now in “dampening the shock” of ballooning mortgage payments.
According to Pasalis, many variable-rate mortgage holders are not actually paying more each month.
“The majority of banks do not really increase your payments on your variable mortgage as rates go up,” he said. “Most of them have fixed payments.”
In those cases, more of a person’s mortgage payment goes toward the interest and not the principal, which effectively extends the life of the mortgage.
For now, Santos and Pereira have put their plans to grow their family on pause.
“We had plans in the next couple years, but I can’t go on maternity leave right now,” she said. “If I go on maternity leave, we won’t pay the bills.”
London Morning7:44Are you on a variable mortgage?
If you own a home with a variable rate mortgage, chances are you’re feeling the pinch from rising interest rates.. Fernanda Santos and her husband bought their first home in 2022 and calls the jump in their payments a nightmare.
PORT ALBERNI, B.C. – RCMP say the body of a second person has been found inside their vehicle after a road washed away amid pouring rain on the west coast of Vancouver Island.
Police say two vehicles went into the Sarita River when Bamfield Road washed out on Saturday as an atmospheric river hammered southern B.C.
The body of the other driver was found Sunday.
More coming.
The Canadian Press. All rights reserved.
The B.C. Greens say Sonia Furstenau will be staying on as party leader, despite losing her seat in the legislature in Saturday’s provincial election.
The party says in a statement that its two newly elected MLAs, Jeremy Valeriote and Rob Botterell, support Furstenau’s leadership as they “navigate the prospect of having the balance of power in the legislature.”
Neither the NDP led by Premier David Eby nor the B.C. Conservatives led by John Rustad secured a majority in the election, with two recounts set to take place from Oct. 26 to 28.
Eby says in a news conference that while the election outcome is uncertain, it’s “very likely” that the NDP would need the support of others to pass legislation.
He says he reached out to Furstenau on election night to congratulate her on the Greens’ showing.
But he says the Green party has told the NDP they are “not ready yet” for a conversation about a minority government deal.
The Conservatives went from taking less than two per cent of the vote in 2020 to being elected or leading in 45 ridings, two short of a majority and only one behind the NDP.
This report by The Canadian Press was first published Oct. 22, 2024.
The Canadian Press. All rights reserved.
Toronto FC captain Jonathan Osorio is making a difference, 4,175 kilometres away from home.
The 32-year-old Canadian international midfielder, whose parents hail from Colombia, has been working with the Canadian Colombian Children’s Organization, a charity whose goal is to help disadvantaged youth in the South American country.
Osorio has worked behind the scenes, with no fanfare.
Until now, with his benevolence resulting in becoming Toronto FC’s nominee for the Audi Goals Drive Progress Impact Award, which honours an MLS player “who showed outstanding dedication to charitable efforts and serving the community” during the 2024 season.”
Other nominees include Vancouver Whitecaps midfielder Sebastian Berhalter and CF Montreal goalkeeper Jonathan Sirois.
The winner will be announced in late November.
The Canadian Colombian Children’s Organization (CCCO) is run entirely by volunteers like Monica Figueredo and Claudia Soler. Founded in 1991, it received charitable status in 2005.
The charity currently has four projects on the go: two in Medellin and one each in Armenia and Barranquilla.
They include a school, a home for young girls whose parents are addicted to drugs, after-school and weekend programs for children in a disadvantaged neighbourhood, and nutrition and education help for underprivileged youth.
The organization heard about Osorio and was put in contact with him via an intermediary, which led to a lunch meeting. Osorio did his due diligence and soon got back to the charity with his decision.
“It was something that I wanted to be a part of right away,” said Osorio, whose lone regret is that he didn’t get involved sooner.
“I’m fortunate now that to help more now that I could have back then,” he added. “The timing actually worked out for everybody. For the last three years I have donated to their cause and we’ve built a couple of (football) fields in different cities over there in the schools.”
His father visited one of the sites in Armenia close to his hometown.
“He said it was amazing, the kids, how grateful they are to be able to play on any pitch, really,” said Osorio. “But to be playing on a new pitch, they’re just so grateful and so humble.
“It really makes it worth it being part of this organization.”
The collaboration has also made Osorio take stock.
“We’re very fortunate here in Canada, I think, for the most part. Kids get to go to school and have a roof over their head and things like that. In Colombia, it’s not really the same case. My father and his family grew up in tough conditions, so giving back is like giving back to my father.”
Osorio’s help has been a godsend to the charity.
“We were so surprised with how willing he was,” said Soler.
The TFC skipper has helped pay for a football field in Armenia as well as an ambitious sports complex under construction in Barranquilla.
“It’s been great for them,” Figueredo said of the pitch in Armenia. “Because when they go to school, now they have a proper place to train.”
Osorio has also sent videos encouraging the kids to stay active — as well as shipping soccer balls and signed jerseys their way.
“They know more about Jonathan than the other players in Colombia,” Figueredo said. “That’s the funny part. Even though he’s far away, they’ve connected with him.”
“They feel that they have a future, that they can do more,” she added. “Seeing that was really, really great.”
The kids also followed Osorio through the 2022 World Cup and this summer’s Copa America.
Back home, Osorio has also attended the charity’s annual golf tournament, helping raise funds.
A Toronto native, he has long donated four tickets for every TFC home game to the Hospital for Sick Children.
Vancouver’s Berhalter was nominated for his involvement in the Whitecaps’ partnership with B.C. Children’s Hospital while Montreal’s Sirois was chosen for his work with the Montreal Impact Foundation.
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This report by The Canadian Press was first published Oct. 21, 2024.
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