RMG's Valko: refinancing a trend to watch in 2022

The recent CMP Hall of Fame inductee talks us through what could be coming down the road in this year's market

RMG's Valko: refinancing a trend to watch in 2022

As a 30-year-plus veteran of the mortgage industry, it’s fair to say that Bruno Valko (pictured) is well-placed to assess some of the trends that may be coming down the line in the near future – and he’s highlighted refinancing as an area that could reap considerable reward in the 2022 market.

Speaking with Canadian Mortgage Professional, the RMG Mortgages vice-president, national sales – who was recently inducted as a new member of the prestigious CMP Hall of Fame – said that rising home values in recent years had increased equity for homeowners to tap into, particularly for remodelling and renovation.

“I think there’s a lot of opportunity to take advantage of the real estate market as it pertains to refinances, [and] lots of opportunity for those interested in home improvement as many are working from home or looking to improve their property for ‘staycations,’” he said.

“The real estate market across Canada saw a 17.7% increase in values on the heels of price increases in 2020 and 2019, so there’s a lot of equity in many properties across Canada for mortgage brokers and their clients to consider and use to improve the quality of life for those consolidating debt or renovating their homes.”

Valko said that with purchases having remained strong throughout 2021 – hitting a record of 666,995 last year, according to the Canadian Real Estate Association (CREA) – market activity was likely to stay robust in 2022, even with inventory shortages posing a problem.

Read next: Variable vs. fixed – which rate has the upper hand?

“I think purchases will continue to be strong as the supply issue relative to demand will continue to be a challenge,” he said. “With strong demand, we’ll hopefully see another strong year on the purchase and sale side.”

Interest rate hikes look set to emerge as a dominant theme of the 2022 market, with the Bank of Canada having held off on an increase in its January statement – but indicating that movement on the benchmark rate was growing ever closer.

Mortgage professionals across the country are also keeping tabs on the prime rate, with Valko stressing the importance of examining the likely consequences of rate increases on the real estate and mortgage markets as a whole.

“Rising interest rates are something that I believe we’re all keeping a very close eye on, and to what extent rates will rise to counter inflationary pressures,” he said.

“Prior to the pandemic we had a prime rate of 3.95% as compared to the current prime rate of 2.45%. It’s important for us to monitor our volumes and purchase transactions, as rates begin to rise, to weigh the impact that rising rates have on the real estate market.”

The fixed-vs-variable debate is another discussion point he’s expecting to continue in 2022, particularly if the variance between best fixed and variable rates narrows if fixed rates do not increase at the same price as others.

Valko, a seasoned entrepreneur who’s staked out a reputation for innovation and inventiveness, gained entry to the CMP Hall of Fame in recognition of the influence he’s had in shaping Canada’s mortgage industry.

Read next: Rate increases – what could they mean for the housing market?

He said his biggest accomplishments in the industry were centred around hiring professional and hardworking staff to support the broker community each day, as well as developing the ability to partner in positive ways with other departments and work collaboratively to grow the business.

“You can never be successful on your own,” he said. “I’ve always prided myself on the ability to work well with my team and with the departments that matter to the overall broker experience we provide them.”

Valko described himself as “grateful” to those that had taken the time to put his name forward in appreciation of his work across the decades to support the mortgage broker channel and help brokers across the country cultivate and expand their business.

“It’s great to be recognized by brokers and having worked for strong companies in the past and currently under MCAP, it offers RMG the ability to be competitive with rates and products that make my job easier,” he said.

He paid tribute to RMG’s ability to offer high-quality capital markets, underwriting, technology marketing and servicing teams – factors that he said contributed to a strong and positive broker experience with the company.

“Competitive pricing with exceptional service levels on the underwriting and servicing side really does make me look good,” he said. “Thank you for that!”