Canada's economy was flat in August: mortgage planning context

The new economic reading

The August GDP release shows growth in nine of 20 sectors. Goods-producing industries edged up 0.1%, while services-producing industries slipped 0.1%. The figures are seasonally adjusted and subject to revision.

Statistics Canada's advance estimate points to a 0.1% decline in September and suggests 0.3% growth for the third quarter. Both are preliminary readings. The September industry figures and official quarterly income-and-expenditure GDP estimate are due November 30.

What the housing-related sectors show

The release's Table 1 reports these August changes from July:

• Construction: up 0.2%.
• Real estate, and rental and leasing: unchanged at 0.0%.
• Finance and insurance: up 0.2%.

These are broad national industry-output measures. Construction includes more than homebuilding, and the real-estate category is not a house-price index. An unchanged national reading does not mean prices were flat in Edmonton, Vancouver or Toronto. A specific purchase still needs local comparable properties and a financing review.

Why GDP does not tell you your next mortgage rate

The Bank of Canada's existing mortgage-rate explainer describes several influences: lenders' funding costs, domestic and international financial conditions, operating costs and borrower risk. Policy-rate changes influence short-term rates, including the prime rates used to price variable mortgages. The Bank does not directly set mortgage rates.

Our interpretation: this GDP release adds economic context, but it cannot establish what a lender will quote for your renewal or what the Bank will decide next. Keep the national data, your lender's written offer and your household budget as separate inputs to the decision.

Questions for a renewal in Alberta, B.C. or Ontario

FCAC's renewal guidance recommends comparing options a few months before the term ends. Switching lenders requires approval from the new lender and may involve fees. This is existing guidance, rather than a rule change announced with today's GDP figures.

• What payment, remaining amortization and fees are shown in each written offer?
• Which income and property documents would another lender need, and when?
• How would the quoted payment fit alongside your other regular expenses?
• What costs or conditions apply if your plans change during the next term?

Our mortgage renewal guide can help organize that comparison. For a local discussion, see our Edmonton mortgage page, or contact Artisan Mortgages with your renewal date and current offer.