Building a Strong Financial Plan for Your Future

Planning your financial future can feel overwhelming with so many decisions to make and unfamiliar terms to navigate, it can be hard to know where to start. A well-crafted financial plan simplifies this process, providing clarity and direction to help you achieve your life goals—whether that’s buying a home, saving for retirement, or growing your wealth. Think of a financial plan as your personalized roadmap—crafted to fit your unique goals and dreams.

What is a financial plan?

A well-structured financial plan provides a clear strategy to help you manage your money, prioritize your goals, and build long-term financial security. A personalized plan enables you to stay organized and make the most of your income to ensure you meet your financial goals. 

A financial plan isn’t one-size-fits-all. It should be customized to fit your life stage, income level, and personal goals. At its core, a comprehensive plan includes key elements such as budgeting, saving, investing, risk management, and planning for future milestones like retirement or buying a home. 

Beyond providing clarity, a financial plan can help you avoid common financial pitfalls, such as overspending or under-saving for retirement. It can also answer essential questions, like: 

  • What’s the best way to invest in my financial goals? 
  • How much home can I afford? 

Working with a professional can help you make the most of your financial plan. A Mainstreet and Aviso Wealth Advisor can guide you through the process, helping you set specific, measurable goals while ensuring your plan evolves with life changes like career growth, family milestones, or shifts in the market. 

With a personalized financial plan in place, you’ll feel more confident making informed decisions and staying on track toward your goals. In the next section, we’ll explore the financial tools available to support your plan and how to choose the right ones for your needs. 

What Financial Tools Are Right for Me?

Choosing the right financial tools is essential for building a strong financial plan. The right tools can help you save, invest, and grow your wealth in alignment with your goals. 

Some commonly used tools include: 

  • Mutual Funds: Professionally managed pooled investments that offer diversification and exposure to various markets, ranging from conservative to higher-risk strategies. 

For those comfortable managing their own investments, Qtrade Direct Investing® provides a self-directed platform where you can trade independently and explore various investment options. 

Our Mainstreet and Aviso Wealth Advisors can help you explore these tools and determine how they fit into your financial plan.

Understanding Your Risk Tolerance in Financial Planning

Risk tolerance refers to how comfortable you are with the ups and downs of market fluctuations in your investments. Identifying your personal risk level is key to building a financial plan that fits your lifestyle and long-term goals. 

Several factors can influence your risk tolerance, including: 

  • Time Horizon: How long you plan to invest before needing access to your funds. 
  • Financial Situation: Your current income, assets, and financial responsibilities. 
  • Investment Experience: Your familiarity with financial markets and products. 
  • Emotional Comfort: How much market volatility you can handle without stress. 

A Mainstreet and Aviso Wealth Advisor can help you assess your personal risk tolerance and recommend investment options that match your preferences. Whether you prefer low-risk, stable returns or are open to higher-risk strategies for greater growth potential, your financial plan can be tailored to align with your comfort level and financial goals.

What Information Do You Need to Get Started?

To create a personalized financial plan that reflects your unique situation, it’s important to gather key financial details before meeting with a Mainstreet and Aviso Wealth Advisor. Having this information ready helps create a comprehensive strategy tailored to your financial goals. 

Here’s what to prepare: 

  • Income Sources: Include salary, bonuses, rental income, or other regular earnings. 
  • Expenses: List monthly living costs, recurring payments, and discretionary spending. 
  • Debts: Outline any loans, credit card balances, or other financial obligations. 
  • Assets: Document savings, investments, property, and other significant holdings. 
  • Financial Goals: Clarify both short- and long-term objectives, such as paying off debt, buying a home, saving for retirement, or funding education. 
  • Insurance and Pension Information: Include details about life insurance coverage, pension plans, and employer-sponsored benefits. 

By preparing this information in advance, your Mainstreet and Aviso Wealth Advisor can provide personalized insights and strategies, helping you stay on track with your financial aspirations.

How Often Should You Review Your Financial Plan?

A financial plan isn’t something you create once and forget. It’s a living document that should evolve as your life changes. Regular reviews help ensure your financial strategy stays aligned with your current circumstances, income, and long-term goals. 

When to Review Your Financial Plan: 

  • Annually: Check if your income, expenses, or savings goals have shifted. 
  • After Major Life Events: Life milestones like getting married, having a child, buying a home, or changing careers may require adjustments to your plan. 
  • When Your Financial Situation Changes: Salary increases, debt reduction, or receiving an inheritance could impact your saving and investing strategies. 

Why Regular Reviews Matter: 

  • Stay Aligned with Your Goals: Ensure your plan reflects your current financial priorities. 
  • Optimize Savings and Investments: Adjust contributions to retirement accounts or investment portfolios based on changing income. 
  • Adapt to Life Changes: Key milestones like paying off a mortgage or starting an RESP may open new financial opportunities. 

By reviewing your plan regularly with a Mainstreet and Aviso Wealth Advisor, you can stay proactive, prepared, and confident in your financial future.

Navigating Complex Financial Conversations

Discussing challenging financial topics with family can feel overwhelming, but open communication is essential for a well-rounded financial plan. Addressing these topics early can help ensure everyone is prepared and aligned with your long-term goals. 

Key conversations to consider include: 

  • Estate Planning: Clarifying how your assets will be distributed and ensuring your wishes are legally documented. 
  • Unexpected Life Events: Planning for situations like job loss, illness, or the loss of a loved one with proper insurance coverage and emergency savings. 
  • Financial Roles and Responsibilities: Defining who will manage finances in case of incapacity or shared financial decision-making within families. 

A Mainstreet and Aviso Wealth Advisor can guide you through these conversations with care and expertise, helping you create a plan that reflects your wishes while protecting your loved ones’ financial well-being.

Take the First Step Towards Your Financial Future

Creating a financial plan is the foundation for long-term success. With a personalized strategy in place, you can move forward with confidence knowing you’re prepared to achieve your financial goals—whether that means saving for retirement, buying a home, or securing your family’s future. 

Take control of your financial future today by scheduling a meeting with a Mainstreet and Aviso Wealth Advisor. Our experts will help you create a plan tailored to your unique needs and guide you through every step of your financial journey. 

Ready to get started? 

Call your nearest branch or Book an appointment online today.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

Am I Retirement Ready?  Key Steps to Plan Your Future

Many people wonder, “Am I ready to retire?” While there’s no one-size-fits-all answer that automatically makes you “retirement ready”, assessing your financial health is a critical first step. Let’s explore how to plan for the retirement you envision.

How Much Should You Save for Retirement?

Everyone’s retirement lifestyle looks a little different—your vision for the future is the foundation of your retirement plan. To start planning with confidence, ask yourself: Do I want to travel often? Will I downsize or stay in my current home? How much will I spend on hobbies, dining out, or supporting loved ones? Understanding these goals helps you shape a financial strategy that fits the retirement lifestyle you imagine. 

The choices you make for your retirement years will directly influence how much you’ll need to save. Being retirement ready means aligning your financial strategy with your personal goals. Once you have a clear picture of what you want, you can turn those dreams into actionable savings targets. 

A common rule of thumb for retirement planning is to aim for 70-80% of your pre-retirement annual income. For example, if you earned $70,000 a year before retiring, you’d need around $49,000 to $56,000 annually to maintain a similar lifestyle. 

Start by estimating your yearly expenses, including housing, food, travel, healthcare, and leisure activities. Don’t forget to factor in inflation—at an average rate of around 2% per year in Canada, the cost of living tends to rise over time, meaning your savings need to keep pace.

Next, consider where your retirement income will come from. Government programs like the Canada Pension Plan (CPP) and Old Age Security (OAS) provide a base level of income, but they may not cover all your expenses. If you have a workplace pension, it can offer additional financial support. Your personal savings—such as RRSPs, TFSAs, and non-registered investments—will often need to fill the gap to ensure a comfortable retirement. 

A smart savings strategy is to start early and aim for 10 to 15 times your final working-year income saved by the time you retire. Need help setting your personalized savings target? Try the Mainstreet Credit Union Retirement Planner to map out a plan tailored to your retirement goals.

How Does a Registered Retirement Income Fund Work?

Once you retire, your Registered Retirement Savings Plan (RRSP) must convert into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71. Here is how it works. 

RRIFs require minimum annual withdrawals starting the year after they’re set up. The withdrawal percentage increases with age (5.28% at 71, 6.82% at 80). For instance, if you have $200,000 in an RRIF at age 71, you’ll need to withdraw at least $10,560 annually (5.28%). Because RRIF withdrawals are fully taxable, it’s important to carefully plan how much you take out each year to help reduce taxes during your retirement. Balancing your RRIF withdrawals with other income sources minimizes taxes and stretches your savings. Try out our RRIF Calculator to estimate your annual withdrawal. 

If you’re married consider a Spousal RRSP if your partner earns less. This enables income splitting in retirement, reducing your combined tax burden.

The Role of an Emergency Fund in Retirement

An emergency fund is a safety net, it is necessary even after you stop working and key component of your retirement plan. Unexpected expenses such as medical bills, home repairs, or family emergencies can arise, and you’ll want quick access to funds without dipping into long-term investments.  

How much should be in your emergency fund? Saving 3-6 months of essential living expenses is a great base for your emergency fund. Keeping the funds liquid and accessible in a high-interest savings account is great for any unexpected expenses that could arise. 

An emergency fund is important when unexpected expenses arise, without an emergency fund, you may need to withdraw extra funds from your RRIF or sell investments during market downturns, which can jeopardize your long-term financial security.

Are You Truly Retirement Ready?

Here are some key questions to ask yourself to assess if you are ready to retire. 

  1. Do I know my expenses? Have you accounted for all potential costs, including inflation and healthcare? 
  1. Do I have enough savings? Have you calculated how long your savings will last based on your desired lifestyle? 
  1. Have I balanced my income streams? Are you maximizing CPP, OAS, workplace pensions, RRSPs, TFSAs, and other personal savings? 
  1. Am I tax-efficient? Have you optimized RRIF withdrawals, TFSAs, and income splitting to minimize taxes? 
  1. Do I have a contingency plan? Is an emergency fund in place for unexpected costs that may arise? 

Retirement readiness isn’t just about reaching a savings goal—it’s about understanding your needs, leveraging income sources, and preparing for the unexpected.  

If you’re unsure if you are retirement ready book an appointment with one of our wealth advisors to create a tailored plan that ensures peace of mind in your retirement years.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

The Importance of Investing Early

Investing when you are young can be hard to get excited about. Experiencing the super-fast speeds of the latest tech gadget or buying the wish list items in your cart could arguably provide more satisfaction than putting money away for retirement – a possible 30-plus years down the road. 

The fact is, the earlier you start investing, the more time your money has to grow. When time is on your side, it’s a huge ally. You benefit from the power of compounding interest, which is when the returns on your investments begin to pay off. Investment accounts such as Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSPs) allow for unhindered growth because investment earnings are not taxed as long as the funds remain in the account. 

Let’s dig into some of the benefits to consider when you start investing early.

How Compounding Interest Boosts your Investments

Investing early and compounding interest work hand-in-hand. Compounding returns on your investment work like building a snowman – the longer you compound your interest or reinvested dividend payments (or roll your snowball through the snow), the larger your initial investment (or snowball) will get.  

Let’s look at an example. Imagine you invest $1,000 and it earns 5% interest annually. After the first year, you will earn $50 of interest on your $1,000 investment, bringing your total to $1,050. Now, in the second year, your new balance of $1,050 will continue to earn 5% interest and at the end of the second year, you will earn $52.50 in interest, bringing your balance to $1,102.50. This process continues and after 10 years, your $1000 investment has become $1,628.89! As you can see, the longer your investment is compounded, or the earlier you start investing, the greater your snowball/wealth will grow. 

You don’t have to wait until you have a lump sum to invest. The power of compounding is amplified when you periodically and consistently add to your funds to grow your investments. Let’s assume you continued to add $100 a month or $1,200 a year to your initial $1,000 investment above and it earns the same 5% interest annually, after 10 years you would now have $16,722! The graph below demonstrates the year-over-year balance, how much interest you cold be earning due to compound interest. Use our TFSA calculator to understand how much your TFSA could compound.

For Illustrative purposes only.

Now, this is just a simple example of how you can make your money work for you through compounding interest. How and where you place your funds for investment factor into that. To help make that decision, you must consider your risk tolerance. Let’s discuss that next. 

Find your Perfect Investment Balance: Understanding Risk Tolerance

Risk tolerance is how comfortable you are with the ups and downs of your investments. If you have a high-risk tolerance, you’re okay with changes in your investment value because you’re focused on the longer term and the higher potential returns of the investment. As an early investor, you tend to have time on your side – especially if you are building your wealth to save for retirement, this may allow you to invest in more growth-focused investments that have fluctuations in value but grow at a higher rate than low-risk investments in the long term.  

If you have a low-risk tolerance, you will prefer safer investments that do not fluctuate in value and provide modest returns. This is especially helpful if you need the funds in the short term, for an upcoming purchase that you’ve been saving for. As you near retirement, you will also transition your investments to a lower-risk profile to ensure you have those funds available as you retire.  

If you’re unsure of your risk tolerance, our Aviso Wealth and Mainstreet advisors can work with you to find investment options to match your risk level and still allow you to capitalize on compounding, having your money work for you.

Time in the Market vs Timing the Market

As an early investor, it’s tempting to look for instant results., However, staying invested for the long term often outperforms trying to time the market. It can be tough to predict short-term market changes, even for the experts, and trying to do so can lead to costly mistakes. When you stay invested for the long term, your money has the opportunity to grow through compound interest. Historically, markets tend to rise over time, meaning consistent investments are more likely to see bigger returns than jumping in and out based on short-term trends.

The Value of Experience

It can seem overwhelming when you want to start your investing journey, but having a wealth advisor who understands your goals can significantly impact your investment journey when building wealth. An experienced advisor has the skills and knowledge to ensure your investments are placed within the right investment vehicles at the correct risk tolerance, working with you as a trusted partner to help you meet your financial goals. 

In times of uncertainty, it can be tempting to sell your investment and hide it under your pillow, especially if you’re not confident in your plan. Similarly, as you mature and encounter new milestones in your life, your needs and goals might change and opportunities might arise. An advisor can put things into perspective talk through scenarios and help you make the most of your investments to keep you on track.

Better Financial Habits

Creating new savings habits may take time, but investing early can make it easier to develop this habit. Paying yourself first by designating a portion of your income into your savings or investment account keeps the money “out of sight and out of mind” and can be made easier with automatic contributions, allowing your savings and investments to grow automatically. This habit lets you steadily work towards your financial goals and build wealth over time. 

Good financial habits allow you to find balance while achieving your goals. Starting young, taking advantage of time in the market, and leveraging compounding interest for building a strong financial future will pay off in the long term.  

Ready to start building your financial future? Whether you have questions or need guidance, our Mainstreet Wealth Advisors are here to help. Book an appointment online or in person today and take the first step toward growing your wealth with confidence!

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

The Importance of a Business Advisory Team

Starting a business is a big milestone and while it is rewarding, it can come with significant challenges. From personal commitment and emotional toll to time investment and financial pressures, it can be hard to navigate balancing the roles that are required to successfully start a business. That’s why delegating tasks and surrounding yourself with a trusted business advisory team is an important first step as a new entrepreneur. This allows you to focus on the foundational workload of developing your offering, marketing, improving the customer experience, and managing administrative tasks, while benefitting from the expertise and experience of the subject matter experts to provide valuable insights in their respective fields.

Having a business advisory team when starting a small business can be crucial to its success. Business advisors can provide expertise, guidance, and support that can help you navigate the challenges and risks of a new venture, seize opportunities that you may not recognize, and ultimately achieve both short- and long-term goals. Let’s jump into some key professionals you should want on your business advice team and how they can help. 

Business Advisory Team:

  • Lawyer
  • Accountant
  • Financial Account Manager

Lawyer

As a business advisor, a lawyer helps you with all the legalities surrounding your business. Not only does a lawyer protect you from any potential risks, but they can also help you lay a strong legal foundation to support sustainable growth. 

More specifically, a lawyer can help you with the legal structure around starting your business based on your goals, liability concerns, and tax implications. A good lawyer can offer support with paperwork, registrations, and compliance, ensuring your business starts on a solid legal foundation. After conception, lawyers can draft, review, and negotiate contracts with suppliers, clients, employees, and partners to reduce the risk of disputes. Should disputes arise, they can help with professional and efficient conflict resolution through negotiation, mediation, or litigation. 

It’s also important to protect the core of your business – your offerings. Lawyers can help you safeguard any of your intellectual property like trademarks, patents, and copyrights. By securing the rights to your intellectual property, your business ensures the protection of both the brand and products or services which is critical for competitive advantage. 

Businesses must adhere to various federal, provincial, local, and industry-specific regulations. Lawyers can ensure that you follow these laws, rules, policies, and obligations to help avoid fines and penalties. 

Having a lawyer as part of your advisory team can help you be proactive, rather than reactive, with legal matters. This strategic advice and support can help you confidently manage and grow your business. 

Accountant

Accountants help your small business by managing the financial aspects of your business. While both accountants and financial account managers provide critical financial guidance, their roles on your advisory team differ. An accountant’s core responsibilities are managing and reporting on the past and present financial status of a business – this includes things like bookkeeping, payroll management, tax support & preparation and financial statement creation. Their guidance is primarily focused on the operational and compliance side of the business with shorter-term outlooks. Think of an accountant as a financial compass -without one it is easy to lose track of your financial health. 

Without the support of an accountant on your business advisory team, it can create challenges around making data-driven decisions based on the profitability of your business and where to invest, cut back, or optimize for higher returns. This sort of financial analysis is critical for many types of business ventures including securing lending for growth opportunities, business valuation with hopes to sell, merge, or attract investors, and succession planning – as each of these steps will require clear financial statements, profitability analyses, and risk assessments before proceeding. 

Together, accountants help keep finances organized, compliant, and optimized in the present, while financial account managers focus on growing wealth, managing risk, lending opportunities, and achieving future financial goals. Both are essential, but their contributions are complementary, with accountants managing financial health day-to-day and financial account managers helping shape a business’s financial future. 

Financial Account Manager

When you begin a small business, a financial account manager is another crucial piece to your advisory team as they are your partner in growth and stability. A knowledgeable account manager is someone who understands your business, the industry in which you operate and can act quickly to recognize and seize an opportunity to accelerate growth. Their efforts are future-focused, with an emphasis on lending, wealth management, strategic financial goals, and risk management. 

While being future-focused, financial account managers also offer essential needs for day-to-day banking. Whether it be services like chequing and savings accounts, payment processors, payroll services, cash management tools and credit cards. Account managers want to make your daily operations as smooth as possible so you can focus on running your business. 

When it comes to lending, your financial account manager can assist with securing financing whether you need a loan or line of credit, to give you the capital to launch, sustain, or expand your business. Another important part of an account manager’s job as a lender is to assist in the commercial mortgage process – when you’re ready for the step of taking your business out of the home or are looking to expand to a larger space, they can help you make it happen! 

Sit down with one of our Commercial, Agriculture or Business Account Managers here at Mainstreet Credit Union to understand how they can play a key role on your business advisory team. We’re here to help you with setting up your operations, providing tailored advice, and lending support. Book an appointment today with our commercial, agricultural & small business team to get started. 

In summary, a lawyer, accountant, and financial account manager are essential to have by your side when running a business advisory team. They offer you all the resources and business advice needed so you can focus on running your business. Together, these business advisors work to ensure your business not only survives but flourishes in a competitive landscape.  

You Have a Business Plan, Now What?

You’ve spent countless hours drafting, researching, and refining your business plan. Congratulations, you’re one step closer to your entrepreneurial dream! Now, how do you start a business, what do you do with your business plan? Having a business plan is just the beginning. Now, it’s time to put it into action.  

A business plan is like a blueprint; it’s only effective if it is followed, executed, and adjusted as you move forward. So, after creating your business plan, what is the next step? 

Here are the steps next to turn your business plan from paper into profit. 

  1. Test The Business 
  2. Conduct Surveys & Focus Groups 
  3. Secure Funding 
  4. Develop & Execute Your Marketing Plan 
  5. Track Progress and Adjust 

Test the Business

Even the best-crafted business plans can hit bumps when they are put into action. A great idea can sometimes have challenges translating in the market. So once your business plan is complete, it is important to test your plan in the real world with real customers. This step allows you to fine-tune your approach early before committing more time and resources. 
 

Offering limited runs or trials to early adopters helps you refine your product and business approach and is an important step when you start your business. It is important to evaluate the pilot tests and understand what worked, what didn’t work, and what can be changed to work better. Early testers and adopters are also crucial for creating buzz and word-of-mouth marketing, so it is important to leave a good first impression during this period. 

Conduct Surveys and Focus Groups

Getting feedback on your idea directly from your target audience is vital. Surveys, interviews, or focus groups can reveal opportunities or pain points you might have missed in your initial feedback. Determining what you want to get feedback on is a great first step in creating a survey or focus group. You can ask a series of targeted questions to get the answers you need to create actionable insights on specific areas. Gathering and incorporating your feedback can also help you realize what you are doing well, what needs adjusting, and what the market needs. Collecting feedback will give you confidence as you move forward knowing that your small business resonates with people.

Secure Funding

If your business requires capital, securing the right funding is essential. There are a number of ways to gain additional funds, and knowing which one is right for you can sometimes feel a little overwhelming. At Mainstreet, our Commercial and Agricultural Account Manager‘s are available to help you with a range of lending options tailored to your specific needs. They will be able to work with you to review your financial situation and recommend the best funding solutions  to meet your goals. Book an appointment today to learn more about the options available to you. . 

In addition, there are also a range of grants or community resources that may be available to you. We encourage you to connect with your local Small Business Enterprise Centre and Community Futures location, or visit the province of Ontario website. Grants can be a great resource that you could utilize to kickstart your business!  

Remember, maintaining ongoing financial health is key to sustaining your business long-term and beyond the initial funding.

Develop Your Brand and Execute Your Marketing Plan

A brand is more than just a logo, it is the story behind your business and how you connect with customers. Having a plan on how to share that story and separate yourself from the competition is crucial. To create an effective marketing plan, it is important to understand where your customers are and the best way to reach them. Developing a website and digital footprint is usually a great low cost first step to help make your business easily found and have conversations with customers. Mapping out a plan that is based on research and aligned to your brand can go a long way in establishing your business, especially if you are just starting out.

Track Progress and Adjust

Being a successful business owner means staying flexible and adapting quickly when necessary. Even with a solid business plan, it’s essential to monitor your progress and be ready to pivot when needed. Market conditions and customer preferences can shift, and if your business isn’t performing as expected, it doesn’t mean your idea isn’t viable—it might just need some fine-tuning or better timing. Whether you’re seeking financing or just want a strategic check-in, our team is here to support you. 

Starting and growing a business demands ongoing learning, flexibility, and persistence. Each step you take after creating your business plan moves you closer to achieving your small business goals. Don’t hesitate to seek advice, reassess your strategy, and celebrate each milestone along the way. 

At Mainstreet, we’re committed to being your partner on this journey. Book an appointment today with one of our Commercial and Agricultural Account Managers to explore how we can help you meet your goals and grow your business with confidence. We’re here to provide the support and solutions you need—let’s take the next step together.

8 Essential Resources to Help Ontario Business Owners Thrive

Did you know that over 98% of businesses in Ontario are small businesses? Yet many entrepreneurs struggle to access the right resources when starting out. Starting a small business in Ontario can be daunting and jumping into the unknown with limited business experience can leave you having more questions than answers. Fortunately, Mainstreet Credit Union has Commercial and Agricultural Account Managers who specialize in small business lending, financial advice, and banking solutions. To help get you started, we’ve compiled a list of 8 resources at the local, provincial, and federal levels. These resources cover everything from drafting your business plan to navigating legal requirements to securing grants.

Essential Government Resources for Ontario Businesses

When you have a promising business idea, you might quickly find yourself wondering exactly how to start a business in Ontario. Fortunately, the business, workplace, and economy page on the Government of Ontario website is an excellent starting point, offering a wealth of free resources designed to help you navigate the process. One of the first steps to becoming a successful small business owner is preparing a comprehensive business plan, which acts as the blueprint for your business. On this site, you will find resources like a downloadable business plan template to get started.

Beyond business planning, the government website also provides guidance on essential tasks such as registering your business, understanding the tax requirements, and familiarizing yourself with relevant rules and regulations. Additionally, Ontario offers several small business grants, which may provide extra funding opportunities for new businesses, depending on the nature of your venture. These resources can make a significant difference in turning your business idea into a reality.

Business Guide For Newcomers To Canada

For newcomers to Canada who are interested in starting their own business, there is often a lot to learn about how businesses are established and operated in the country. To help with this process, the Government of Canada has created the Business Guide for Newcomers, a valuable resource that outlines the essential steps for starting a business in Ontario. This guide covers everything from a business plan template to understanding the necessary licenses and permits, as well as providing a detailed start-up guide to help you embark on your journey as a small business owner and newcomer to Canada.

It’s also crucial to grasp the legal aspects of running a business, including what activities are allowed, what restrictions may apply, and which types of work permits or business licenses you might need. Being well-informed about these requirements will help you avoid potential legal issues and set your business up for long-term success.

Your Local Economic Department

Your local economic department offers a wide range of support to help businesses start, grow, and thrive. These community services offer valuable resources such as small business grants for additional funding, networking events to connect with entrepreneurs, and other programs aimed at helping you make a positive impact in your community.

It’s important to remember that each community has its own set of different municipal bylaws and zoning regulations, which you must follow to stay compliant. Researching these rules and staying up-to-date on any changes is key to avoiding any potential legal trouble.

At Mainstreet, we leverage our strong business connections and local expertise in our communities to direct you to the right resources for additional support. In the meantime, here is a list of local economic partners in our communities that can help grow your business and achieve success.

Small Business Enterprise Centres

The Small Business Enterprise Centres (SBECs) total 47 locations across Ontario. The SBECs offer entrepreneurs and small business owners all the tools they need to start and grow their businesses. Each SBEC has a team of dedicated professionals, who can offer unbiased advice on your business matters. They offer many services that any small business can take advantage of. From services like reviewing business plans, mentoring and networking, training, and small business grant opportunities. Your local SBEC has local and professional experience they can rely on and could be a key mentor in your journey as a small business owner.

Ontario Chamber of Commerce

When you start a business in Ontario the Ontario Chamber of Commerce and your local chamber of commerce offer a variety of programs designed to support the growth and development of local and Ontario small businesses. These programs connect business owners to digital adoption programs, trade and export events, and networking opportunities. They also help entrepreneurs identify their digital needs and help implement strategies to get their businesses online.

Mainstreet is actively involved in local chamber events, allowing us to stay connected with the local business community, gain insights into their needs, and continually enhance our understanding of the challenges and opportunities facing small businesses.

Pro-Bono Ontario

As a small business owner, there are a lot of legal considerations you’ll need to navigate. Pro-Bono Ontario is a great service that provides free legal help to small business owners over the phone. The Pro-Bono Ontario Hotline addresses common issues such as writing or reviewing business documents and contracts, understanding if you need to incorporate, or what should you look out for when signing a commercial lease.

To further support small business owners, there are a series of short videos on various topics to help small businesses, including basic employment law, an introduction to intellectual property, and a guide to getting paid.

Invest Ontario

Invest Ontario acts as a bridge between private and public sectors, streamlining the investment journey and offering comprehensive support every step of the way. Specializing in manufacturing, life sciences, and technology; they are committed to strategic investments that create jobs and drive Ontario’s long-term economic growth. They offer business guidance in optimizing government resources and securing strategic investments to drive long-term economic growth. Speak to Invest Ontario to learn sustainable ways to grow your business in Ontario.

Mainstreet Credit Union

Whether you’re just starting your business in Ontario or simply looking for additional small business resources, Mainstreet Credit Union is here to support you with free advice for both personal and commercial banking. From day-to-day banking needs to loans, lines of credit, or mortgages, we’re committed to helping you and your business thrive. We understand that every business is unique, so we take the time to understand your business, your specific needs, goals, and challenges to provide tailored solutions and advice.

In addition to our financial expertise, Mainstreet works with trusted local professionals across a range of industries to ensure you have access to all the resources necessary for your business to succeed. Book an appointment today and take the first step toward reaching your business goals with a trusted financial partner who’s dedicated to your business’s growth.

What is EBITDA and Why Should You Care?

What is EBITDA? 

If you’re an entrepreneur or business owner, you may have heard the term ‘EBITDA’ before, but do you know the meaning of EBITDA? Either pronounced ‘eh-bit-dah’ or ‘ee-bit-dah’, the word is an acronym for the phrase, ‘Earnings Before Interest, Taxes, Depreciation and Amortization’. EBITDA is a financial metric that shows a company’s profitability by focusing on its core operations, excluding costs related to financing, taxes, and non-cash expenses like depreciation and amortization. Essentially, EBITDA gives a clearer picture of a company’s operating performance, without the impact of financial and accounting decisions that often fluctuate. 

EBITDA is sometimes used to determine whether a business can support a potential loan, line of credit, or mortgage they may be looking to take on. It allows lenders and potential investors to understand profitability clearly and removes many variables that can make it hard to compare “apples to apples”. It’s important that business owners understand the EBITDA formula and how it is calculated because it could be the difference between securing a business loan or missing out on key growth opportunities. 

How do we calculate EBITDA? 

As we now know, EBIDTA is “earnings before interest, taxes, depreciation, and amortization.” To calculate EBITDA, we have to add those items back to earnings (also known as net income). 

The EBIDTA formula is EBITDA = Net Income (Earnings) + Interest + Taxes + Depreciation + Amortization 

Or if you have operating income, it can also be calculated as:  

EBITDA = Operating Income (EBIT) + Depreciation + Amortization

Let’s have a look at the components that make up EBITDA. 

  1. Earnings (Net Income)
  2. Interest
  3. Taxes
  4. Depreciation
  5. Amortization

Earnings (Net Income)

Earnings, also known as Net Income is found in the business’s financial statements at the bottom of the Income Statement for corporations, or schedule of Business Activities for sole proprietors. They can also be often labeled as Net Profit/Loss or Net Operating Income. This is the summary of all sources of revenue minus all eligible expenses. This includes cash and non-cash expenses, and while Net Income may be a metric of profitability, it may not fully represent the actual cash available in the business as it includes paper only expenses for tax purposes and existing financing costs.

Interest

Depending on how a business is capitalized, for example how its assets are structured, there may be financing already in place from how they bought those assets. If so, any interest paid on the debts for those assets is an eligible expense for tax purposes in calculating profitability. In this case, the interest was paid along with principal payments to reduce the debt that was taken on when the asset was bought. Upon adding back the interest will allow your Commercial & Agricultural Account Manager to compare a given business’s performance to others, regardless of how the business is financed.

Taxes

Business income taxes are the T in EBITDA. Adding taxes removes the variability in comparing the performance of different businesses due to the differences in taxes that could be required. Depending on the region, type of business, and other unique factors, taxes can vary between similar businesses, so adding the taxes payable for that year allows for a more apples-to-apples comparison of the business to others.

Depreciation

Depreciation is a paper expense for tax purposes that allows a business to write off the costs of a fixed asset over its useful life span or according to tax regulations. Since depreciation doesn’t involve cash flow, they are added back to EBITDA to provide a clearer picture of a business’s ability to repay debts. For example, a small business might depreciate equipment like machinery or vehicles, spreading the cost over several years.

Amortization

Very similar to depreciation, amortization is also a paper expense for tax purposes and is a write-down for intangible or non-fixed assets. For example, this could include goodwill paid, a first franchise fee, or patent rights. Although it helps for tax calculations, amortizations don’t involve actual cash flows and are added back to EBITDA to reflect the cash that is available for debt repayment.

So why use EBITDA and is it important for business owners and managers?

As a small business owner looking to borrow money, EBITDA may be one of the metrics used to evaluate past performance, as well as to set an expectation for your future performance over the time that you may be carrying that debt. 

Most financial institutions have a debt service covenant ratio (DSCR) that will look at the ratio of EBITDA to external payments and other significant debts the business has to pay. Depending on the industry or type of business, there will be an expectation for a minimum proven DSCR. For example, this could be 1.10:1 or 1.20:1. As part of the evaluation on whether to grant you the loan, most financial institutions may also require that you maintain that level of performance over the time that you are paying back the loan.  

For small businesses understanding EBITDA is valuable for understanding your potential borrowing abilities. By knowing your EBITDA, you can estimate a potential loan or line of credit that may be available to you and incorporate this into your plans to grow your business. 

If you’re still unsure or want to dig deeper, you can meet with one of our Commercial & Agricultural Account Managers to better understand what EBITDA is and the lending available to you to help take your small business forward.  

Book an appointment today to get started.

How to Start Saving for a Down Payment

Saving for a down payment is an exciting first step to home ownership. Whether you’re saving for your first home or maybe a vacation property, here are 6 tips and tricks to help you save money for a down payment, understand what solutions work best for you, and how you can maximize your savings and get started on your journey to owning a home.

In Canada, a down payment is required when mortgaging a property. Your down payment must be at least 5% of the homes total purchase price. If a home is more than $500,000 a 5% down payment is required for the first $500,000 and 10% is required for anything the remaining balance. Homes that have less than a 20% down payment are considered a high ratio mortgage and are required to have mortgage default insurance.

Separately, a minimum 20% down payment is required for a 30-year amortization period or for a non-owner occupied home. Don’t worry – You can use our mortgage calculator to understand how much you need to save for a down payment.

Now let’s jump into it.

  1. First Home Savings Account (FHSA)
  1. The Home Buyers Account
  1. High Interest Savings Account
  1. Automate Your Savings
  1. Build a Budget
  1. Put Aside Additional Income
  1. Start Saving for a Down Payment Today

1. First Home Savings Account (FHSA)

The new First Home Savings Account (FHSA) is a great tool for someone saving for a down payment as a first-time home buyer. The FHSA has the tax advantages of an RRSP and the withdrawal benefits of a TFSA, meaning that you can deduct contributions from your taxes, and you are also not taxed when you withdraw. Canadian residents aged 18 years or older who have not owned a principal residence within the last 4 calendar years can save up to $8,000 a year in the account and can carry over unused contribution room to the following year. As a first-time home buyer you are unable to use an FHSA for a non-owner occupied home.  Reach out to a Mainstreet Advisor to open your FHSA and get started on your path to home ownership.

2. The Home Buyers Plan

The Home Buyers Plan (HBP) allows you to access funds from your Registered Retirement Savings Plan (RRSP) to put towards the purchase of your first home. Although this home must be your principal residence, it doesn’t have to be a single-family home, it could be a multi-family home allowing you to rent out a portion of that property to cover expenses. Each person can withdraw up to $60,000 interest free from their own RRSP account to contribute towards the down payment of the home. Funds withdrawn from your RRSP are tax free provided they are paid back within 15 years of the home purchase and repayments must start no more than five years from the withdrawal date.

3. High Interest Savings Account (HISA)

Another great alternative to save for down payment is with a High Interest Savings account (HISA). A HISA is a great way to save with higher interest rates than a regular chequing or savings account. Mainstreet’s HISA has no monthly fee and unlimited deposits!

This account also allows you to jointly save with your partner or spouse and is a great solution for those who have saved the maximum amount in their FHSA or TFSA. At Mainstreet we provide you with the ability to have your HISA be within a FHSA to allow for the tax benefits. To open a HISA book an appointment with one of our advisors or open your account online using Open Anytime.

4. Automate your Savings

One of the best ways to start saving for your house down payment is to set up a scheduled withdrawal plan. You can do this by having a set amount of money come out of your chequing account on a regular basis and go into a savings plan. Whether you decide to set up a Tax-Free Savings Account (TFSA), a Registered Retirement Savings Plan (RRSP), First Home Savings Account (FHSA) or a high interest savings account (HISA). This is a great hands-off approach to take in reaching your goal of saving to buy your home. Understand what is best for you by booking an appointment with one of our advisors.

5. Build a budget

If you’re unsure about how much you can set aside each month to save for a down payment, another option that can help you get started could be creating a budget. Understanding where your income is going each month and what you have left over will make you aware of what your fixed and discretionary expenses are and where you can make adjustments to achieve your savings goals in the time frame you choose. Any extra funds you have left over can go towards your savings goals for a down payment. A Mainstreet advisor can help you create a budget that fits your financial goals.

6. Put aside additional income

Another great option that can help you save money for a down payment for a house is putting away any additional income you may receive throughout the year. This extra income could include your bonus from your job, inheritance, cash gifts, your tax refund, or money received from a side hustle. Putting this money aside means a boost to your savings without impacting your monthly budget.

7. Start Saving for a Down Payment Today

Saving for a down payment is an exciting goal and it can take some planning to help keep you on track. You can reach out to a Mainstreet Advisor to get started or to learn more about saving for a down payment, creating a savings plan or opening an account. Book an appointment here. Interested opening an account online? Use our Open Anytime to get started.

How To Become Mortgage Free Sooner

Ever wonder how to pay off your mortgage faster? Owning your home sooner and becoming mortgage-free is a financial goal that many people strive for. Paying less money in the long run, freeing up cash after your payments are over and increasing your home equity are just some of the benefits of being mortgage free sooner. Learn the benefits of a Mainstreet mortgage here. 

In order to understand how to pay off your mortgage sooner, let’s start with understanding what makes up your mortgage payment. When you make a mortgage payment, a portion of the payment goes to the original mortgage amount owed (also referred to as the principal) while the other portion goes to paying off the interest. Typically, as time goes on, a higher portion on each mortgage payment goes towards paying off the mortgage principal vs the interest. Lowering the amount of interest you pay, helps put more of your payment towards the principal. 

Below, we will outline a few simple strategies that allow you to be mortgage free sooner. 

Change your mortgage payment schedule.

The first way you could shave years off your mortgage and save money is by changing your payment frequency or using accelerated payments. If you switch your monthly mortgage payment to a bi-weekly payment schedule you will make 26 smaller payments throughout the year. You can also opt to use accelerated semi-monthly or weekly payments. This method can be done by dividing your monthly payment into 2 or 4 smaller payments that total the monthly payment amount. Both accelerated and adjusted payment frequency can reduce the amount of interest paid on the mortgage, which can translate to saving thousands of dollars in interest over the lifetime of your mortgage and reduce the total amount owing to become mortgage free sooner. Reach out to a Mainstreet advisor to see which payment frequency works best for you.  

Shorten your amortization period

The amortization period of a mortgage is the length of time you have agreed upon to repay your mortgage. Instead of automatically picking the standard 25-year amortization period, you can choose a shorter amortization period to pay off your mortgage in fewer years. With this option, payments will be higher than a 25-year amortization period; however, if you have additional room in your budget to pay more each month, it means you will be paying less for your home in the long-run and own your home sooner. Use our mortgage calculator to understand how a shorter amortization period might benefit you.

Round up your payments 

Another great way to pay off your mortgage sooner is rounding up your scheduled payments. This option might have a minimal impact on your household budget but has big benefits and it can help you pay off your mortgage quicker. Adding a little extra to your mortgage payment, for example, from $1,950 to $2,000 or $2,400 to $2,500, is a great way to put extra money towards the principal amount and become mortgage free sooner by reducing the interest paid over the lifetime of your mortgage. Understand how rounded payments could pay down your mortgage quicker with our mortgage calculator. 

Take advantage of pre-payments 

Any time you have extra money available, consider putting it towards your mortgage to help reduce the principal amount owing. Mainstreet offers generous pre-payment options with all our mortgages which enables you to become mortgage free sooner. Our first option allows you to pay up to 20% of the original principal each year, for example, if your original mortgage was $300,000, you can pay up to $60,000 each year – even as the mortgage amount reduces over time. Secondly, monthly payments can be up to doubled. For example, if your mortgage payment is $1,500 you can double up your payment to $3,000 or pay somewhere in between if that fits your budget better. You can also make a lump sum payment towards your mortgage. This is a great way to use a tax refund or bonus, for example. Interested to know how pre-payments can get you mortgage free sooner? Book an appointment with one of our advisors.

Keep the same payment when you renew

As we know, mortgage rates fluctuate based on the Bank of Canada’s overnight rate. When your mortgage is up for renewal, if interest rates are lower than your current rate, you could opt to keep the same payment as your previous term to help pay more towards the principal amount of your mortgage. While it is enticing to reduce the payments when possible, the benefit of keeping the same payment as your previous term means that you can consistently put funds towards paying off your mortgage quicker and your household budget will remain the same. This method will save you thousands in interest over the lifetime of your mortgage.

Use income from your property to pay down your mortgage 

There are ways to make your property work for you. Perhaps you have a basement suite you could lease to help pay off your mortgage earlier or have a garage or storage space you can rent out. Using the additional income generated by renting out these vacant spaces and setting that towards your mortgage will pay off your mortgage quicker and in return you will build your home equity faster. Using our pre-payment options listed above, you can put this money directly towards the principal and reduce the interest paid over the lifetime of the mortgage.

Get Started Today

Whether your mortgage is with Mainstreet or not, book an appointment with a Mainstreet Advisor and we will work with you to discover how you can be mortgage free sooner. You can use our Mortgage Calculator to determine which options work best for you, or you can learn more about our Mainstreet Mortgages or view our rates.

What is a Home Equity Line of Credit (HELOC)?

View our HELOC rates and get started today.

What is a Home Equity Line of Credit?

A HELOC, also called a homeowner line of credit, is a form of revolving credit that allows you to borrow money using the equity and value you’ve built through owning a home and paying off your mortgage. Like a credit card where you are given a maximum amount you can spend from, a HELOC lets you withdraw an amount in relation to how much you need at the time. 

A HELOC often has a lower interest rate than traditional loans and is typically a more affordable way to borrow funds. At Mainstreet, a HELOC is secured by your principal residence and interest is only charged on the amount used. You can apply for a HELOC at any time that works for your financial needs. When the funds become available, you can use the funds as needed. 

When to use a HELOC?

A HELOC is a great tool to have in your financial toolbox. It can be used in a variety of ways to help you reach your goals. It can help consolidate higher-interest debt like credit card debt, personal loans, and overdrafts into one lower-interest payment, saving you money and simplifying repayment. A HELOC can also be used to finance home renovations or repairs. This is a useful tool for not only increasing property value but also making your home more enjoyable for you right now. It can also be used for larger purchases such as appliances, education, vehicles and more.

How much can I borrow?

There are a few factors that go into how much you can borrow. The amount you can borrow is dependent on the equity you have in your home and cannot exceed 70% of the total value of your home. As your home equity increases, so does your borrowing capacity through a HELOC. Secondly, our advisors will determine your debt-to-income (DTI) ratio; this is your gross monthly income that goes towards paying your monthly debt obligations. Debt-to-income ratio is used to understand what amount of your income is going to existing payments to ensure you are not over burdening yourself. A low DTI ratio can make you eligible for a higher loan, a lower interest rate, or a combination of both. 

Book an appointment with your Mainstreet Advisor to review your documents and understand how much you can borrow with a HELOC. 

How do I pay off my HELOC?

Regular monthly interest payments on the amount used are required for a HELOC. If you wish, you can also pay the principal of your HELOC in combination with the monthly interest payment. To put a payment towards the principal of your HELOC you can contact one of our branches, make a payment with online banking or set up automatic payments from your Mainstreet Account. Once you pay the principal, that portion of the balance becomes available again for future use. Once the entire balance is paid off, no more monthly payments are required. Your HELOC remains open with those funds available for whenever you might need it next. 

What makes a home equity line of credit different from a traditional line of credit?

Although similar, because a HELOC is secured by your home it makes it less risky for the lender and in return the lender offers lower interest rates. For the same reason, you can often borrow a larger amount, dependent on the equity that is available in your home. View our current HELOC rates. 

If you still have questions, call or book an appointment to understand how a Mainstreet Home Equity Line of Credit could help you achieve your home improvement or life goals!

First-Time Home Buyer Guide

The road to buying your first home and current mortgage rates can feel overwhelming. With many things to consider throughout the process and lots of decisions to make, it’s sometimes hard to know where to start. This guide will help you understand the steps and things to consider as a first-time home buyer.    

Navigating the complex process of owning your first home can be challenging and a time-consuming process with no prior experience. Mainstreet advisors are here to provide you with up-to-date information and step-by-step help to get you on your path to home ownership. 

  1. How much can you afford?
  2. Down Payment
  3. Closing Costs
  4. Pre Approval / Pre-Qualified
  5. House Hunting and Approval

How much can you afford?  

One of the first things to understand when buying a home is how much you’re able to afford. Having this information not only helps you plan and save, but it will help you when you begin the search for your home. The amount you can afford is determined by several factors including your household income, current debts, fixed and variable expenses and the amount of down payment you have. These factors are used to create a Gross Debt Service Ratio (GDS) and a Total Debt Service Ratio (TDS) that help lenders determine the amount of mortgage you can qualify for without overextending yourself.   

Although it can sound complicated, it doesn’t have to be! You can reach out to one of our Mainstreet Advisors who can help you get a full picture of where you are currently, what your goals are and can help create a plan to help you achieve your goals of home ownership. At your appointment you will review your financial background, and credit history. This will determine the best price range for your income and budget. We will also discuss what current mortgage rates are available to help you understand which mortgage product is right for you. 

Alternatively, you can use our Mortgage Affordability Calculator to give you a sense of the price range you are in. This will help give you a starting point as you begin your planning. 

Down Payment

The down payment is a key part of the home buying process. In Canada, your down payment must be at least 5% of the home’s total purchase price. If a house is more than $500,000 a 5% down payment is required for the first $500,000 then a 10% deposit is required for the remaining portion. Any down-payment under 20% is a high-ratio mortgage and is subject to mortgage protection insurance. Premiums are based on both the size of the down payment and the value of the mortgage. You can use the Mainstreet mortgage calculator to understand how your down payment could affect your payments. 

There are several ways to effectively save for a down payment and help you achieve your goals sooner. Let’s explore those below.

First Home Savings Accounts (FHSA)

This new account is great for a first-time home buyer. Canadian citizens 18 years and older can now save up for their first home with the new FHSA. Like a Registered Retirement Savings Plan (RRSP) contributions are tax deductible, while like a Tax-Free Savings Account (TFSA) any income made on an FHSA is tax-free. Learn more about our FHSA here. 

The Home Buyers Plan (HBP) 

The Home Buyers Plan (HBP) allows you to access funds from your Registered Retirement Savings Plan (RRSP) to put towards the purchase of your first home. Each person can withdraw up to $60,000 interest free from their own RRSP account to contribute towards the down payment of the home. Funds withdrawn from your RRSP are tax free provided they are paid back within 15 years of the home purchase and repayments must start no more than five years from the withdrawal date. 

High Interest Savings Account (HISA)

Another great way to save for your down payment is within a High Interest Savings account. You can open a savings account online in a couple of minutes and start on your journey towards home ownership. Automating deposits is a great, hands-off way to save for your down payment. Here you will earn a set interest rate with no risk to your funds. This account allows you to jointly save with your partner or spouse and is a great solution for those who have saved the maximum amount in their FHSA.

Cash Gifts

If you are lucky enough to have a down payment as a gift or inheritance from family. It is important to show how those funds we acquired. As part of the process, your advisor will review these documents and ensure that the appropriate information has been collected.

Closing Costs

Closing costs are not a factor that initially comes to mind as a first-time home buyer. These costs are expenses that are required as part of finalizing the purchase of a property. These include legal fees paid to your lawyer, title insurance, land transfer taxes, home inspections, and appraisals. Typically closing costs are between 2%-4% of the price of your home so don’t forget to include this in your savings plan. 

Pre-Approval / Pre-Qualified

When you are ready to begin looking for your home, booking an appointment with a Mainstreet Advisor is a great way to prepare. At this final milestone, you can work with your advisor to gather all the relevant paperwork and cover the last details to ensure you are ready to make the offer when you find that dream home. A Mainstreet advisor will review your supporting documents, review current mortgage rates and can pre-qualify you to make sure that when you find “the one”, the process moves quickly and goes smoothly.   

House Hunting and Approval

After your pre-approval appointment, happy house hunting! Your Mainstreet advisor is here to assist the entire way. Once you have an offer accepted on your dream home, send us the paperwork and we will take care of the rest! 

Navigating Rising Interest Rates

Do you feel like we’ve been on an interest rate roller coaster? The low interest rates that we’ve all become accustomed to seem to have disappeared, and we’re now feeling the inflation pinch – from the grocery store to the gas pump. Unfortunately, if you’re amongst the many faced with renewing your mortgage in upcoming months, it’s highly likely that you’ll be navigating the rising interest rates on that too. You’re probably left with one question: “What can I do?”

First and foremost, we recommend that you start talking with a trusted Mainstreet advisor early. Any mortgage renewal is a big decision, now more than ever, that will impact your financial life for at least the next 1 to 5 years. You and your advisor will go over all your renewal options in detail so that you’re prepared to make the best decision possible for your situation. Starting the conversation early ensures that you’re not rushed into anything or having to make a quick decision right at the renewal date.

We like to discuss your short, mid, and long-term financial goals to determine what you can do now, to set yourself up for success in the long run. With that being said, paying off your mortgage as quickly as possible may be on hold, while keeping your mortgage payment manageable is top priority.

Below we have detailed a list of items that you can review and edit to reflect what you want out of an appointment with a Mainstreet advisor when discuss your upcoming mortgage renewal:

Fixed vs. variable rates

When renewing your mortgage, you’ll need to decide whether to go with a fixed or variable interest rate. Fixed rates offer predictability and stability, while variable rates can fluctuate based on market conditions. If you want to do some research before your meeting, you can find our mortgage rates here.

Structure

You’ll need to decide on the structure of your mortgage.  Discuss with your advisor about splitting your mortgage into chunks, with the current rate environment, renewing the full balance for a 5-year term, may not be the best solution for you.  For example, what does splitting the balance into a 1- and 3-year term look like for your budget.  No one has a crystal ball regarding what interest rates will do next, keeping options on the table will allow you to make changes along the way. 

Payment Frequency

You may want to consider changing your payment frequency to either increase or decrease your payments. For example, switching from monthly to accelerated bi-weekly payments can help you pay off your mortgage faster and save on interest costs.  Aligning payment dates with your pay date will help with budgeting.

Prepayment options

You may have the option to make prepayments on your mortgage, allowing you to pay down the principal faster in order to save on interest costs.

Your financial situation

It’s essential to consider your current financial situation and any changes that may have occurred since you first took out your mortgage. This includes any changes to your income, expenses, or credit score.

Review your budget

Consider things like cancelling monthly subscriptions that you no longer use or penciling out how much that daily latte actually costs per month to get a better view on your weekly/monthly expenditures. Remember, this isn’t to take the joy out of the life’s simple pleasures, but to put you at ease when it comes time to making the bigger financial decisions. If that latte makes your day, we’ll move onto the next item on the list! Our advisors are always here to help with creating a budget that works best for you.

Some of the ways that Mainstreet may be able to help:

Refinance your mortgage

This involves completing an application and providing income confirmation. When approved you may be able to consolidate your debts into your mortgage to lower your overall monthly payments freeing up cash flow.

Payment deferral

When approved this allows you to temporarily suspend or reduce your mortgage payment for a specified period of time. This can be useful if you are experiencing financial difficulties, such as a job loss or a medical emergency. Keep in mind that the payment deferral means that once you resume payments, your mortgage payment will increase for the remainder of the term.

Modifying payment terms

By changing the terms of your mortgage, it could lower your monthly mortgage payment obligation. Doing this may help relieve financial pressure. Please note that lowering payments or extending your amortization will increase your over all interest costs. When you get back on your feet, make sure to increase your payments.

Blend and extend

This is a type of renewal where you blend your existing interest rate with the interest rate currently offered at Mainstreet. This results in a new interest rate somewhere in between. In addition, your term will be extended by the length of the new term. This can be done to adjust your mortgage terms to better suit your financial situation.

If your mortgage payments seem overwhelming and you find yourself struggling to make ends meet, there are several options that you can consider, and we’re here to help you find them and put them in place. We know how hard it can be to have these, sometimes uncomfortable, conversations, but we want to assure you Mainstreet is here to help without judgement. We live in the same communities, shop at the same stores, are subject to the same inflation, and feel that same pinch. The only difference is that because of our job, we know some tools to make life a little easier, and we want to share them with you.

Learn more about Mainstreet’s mortgage options.

Book a meeting with a Mainstreet advisor.

Buying Commercial Property

Written by: Adele Mineau

So, you’ve decided to buy a commercial property…

You have funds to invest but the stock market makes you nervous and you like the idea of investing in property that is tangible. You have made an appointment to speak with a Commercial Account Manager and they have asked for a slew of paperwork.

What might they ask for and why?

ID, Personal Net Worth Statement, 2-3yrs Personal Income Tax Returns with the latest Notice of Assessment will be requested. If you have a corporation they will also asked for Articles of Incorporation, Shareholder/Director Registers, and 2-3yrs financials with Notice of Assessment. Most of this information is easily explainable, they want to know who you are, what assets and liabilities you have, and how much you make annually. For the corporation it is necessary to know where the corporation is located, the structure of the corporation, and what the corporation can do. The Registers verify the shareholders (owners) and the directors (people who can make decisions for the Corporation). Most of this information can be forwarded via email directly from your accountant and lawyer.

When you already have a property in mind, your account manager will want to know more about the property. Depending on where you are in the process and what kind of commercial property you are looking at, an account manager could request an MLS listing, 2-3yrs financials for the property, existing leases, rent roll, a Purchase & Sale Agreement, a business plan, an ACI appraisal, an Environmental Report, and a Building Condition Assessment. It could seem like a lot, but it is important to remember the primary purpose of acquiring this information is to assist making your decision by having all the information that could influence the profitability of the investment. Some of this information is obvious, MLS listing outlines the sale information, financials provide a look into revenue & expenses, leases and rent roll can provide an idea of tenant mix and what expenses tenants are responsible for, and the Purchase & Sale Agreement provides the address, seller, buyer, purchase amount, conditions, and important dates.

Let’s discuss the remaining information as not everyone has needed to deal with this information before. A business plan provides an outline of ambitions, how they will be achieved, and a timeline for those achievements. For example, are you going to raise the rent? Is that reasonable according to the market? Will you raise them gradually?

An ACI appraisal is completed by an appraiser who is designated by the Appraisal Institute of Canada to appraise residential, commercial, industrial, institutional agricultural, land and special use property types. They are best qualified to provide an approximate value on a commercial property as they take into consideration comparables (sale prices of similar properties), income results (based on real or potential revenue considering expenses and the market), and cost approach (land cost plus cost to rebuild).

An appraisal answers the question “Are you offering too much?”

An Environmental Report Phase I provides a visual and historical inspection to identify any potential current or past environmental issues. If issues are found a Phase II is required. Phase II includes environmental testing, sampling, and analysis.

An Environmental Assessment answers the question “Are there any potential dangers or remedial costs from former uses of the property?”

A Building Condition Assessment describes the structural components (roof, walls, etc.), interior components (plumbing, electrical, etc.), and exterior components of the building, identifies any issues or deficiencies, and projected costs of remedying them. A Building Condition Assessment answers the question “What are the hidden costs of this property going forward?”

Remember, not all of this information will be requested for every application, but if it is requested, you will know why and the importance of the information it provides. Happy property hunting!