Rate race: why the focus should be on overall solutions, not any one factor

Community Trust takes 'creative, optimistic approach' to finding best options, said Lisa Abbatangelo

Rate race: why the focus should be on overall solutions, not any one factor

This article was produced in partnership with Community Trust.

Mallory Hendry, of Canadian Mortgage Professional, sat down with Lisa Abbatangelo, VP of mortgage operations at Community Trust, to discuss the changing rate landscape.

Rising rates are no big secret and this change in circumstance wasn’t unexpected, but after years of riding an incredible wave of low interest rates, next to no inflation and rising home values that allowed people to maximize unbelievable investment return, “we’ve turned the corner into a different economic climate – and it’s one some haven’t experienced before,” said Lisa Abbatangelo (pictured), VP of mortgage operations at Community Trust.

“This is a unique experience we’re in right now, facing headwinds of rising rates and inflation. It’s crucial that brokers know their clients very well to identify who needs more attention and education to guide them through this change,” she said.

Rising rates should prompt clients to reassess their financial position and goals, and that represents an opportunity for both brokers and Community Trust to help clients navigate through this rising rate landscape to stay – or become – financially secure. It’s also important more than ever to remind everyone that it’s not all about the rate, Abbatangelo warned. The focus should be on the overall solution and how it meets each customer’s needs at any given time. People tend to think it’s not the right time to make a move when rates are rising, but it could be based on other factors, she noted.

Abbatangelo also cautioned against people panicking about the shift and hastily locking into a mortgage, not considering prepayment charges or clauses which could be restrictive if something changes in their personal circumstances or with the economic environment. It’s important they understand everything they’re signing up for, not just the rate.

“Understanding there’s more to a mortgage is where a lot of people unfortunately fall short because they’re single-mindedly thinking about rates, and brokers can help customers understand that larger picture,” said Abbatangelo. “Brokers can also break through the smoke and mirrors about where they’re at financially, determine exactly what they need from a solution and effectively guide them through one of the biggest decisions of their lives.”

Whether it’s someone’s first home, next home or forever home, whether it’s a purchase or refinance, “we’d like to help,” Abbatangelo summed up, adding that at Community Trust “we pride ourselves on a creative and optimistic approach to finding the best options by going beyond traditional thinking and creating custom solutions.”

“Brokers should keep in mind that we provide a fair and balanced approach to evaluating credit, flexible solutions for self-employed individuals and that we’re here to support them with their market share gains by providing access to highly competitive rates, products and fees,” she said. “And most of all, we care. We care about our broker partners, and we care about our customers.”

Looking to the immediate future, Abbatangelo said that signs suggest rates will continue to rise through 2022 and 2023, but it is unclear whether the rise will be rapid or more gradual. Once inflationary pressures subside, a clearer picture might emerge – but with so many factors at play domestically and internationally, she said it’ll be interesting to see what dictates inflation and what the government does to mitigate it. Coming out of a precedent-setting period of low rates into a similarly precedent-setting environment shaped by the COVID-19 pandemic and supply shortages across the globe, “it really is a crap shoot at this point,” she said.

Abbatangelo predicts the steady stream of applications Community Trust is seeing will grow, like what it experienced a few years ago with the B-20 stress test. Business will cascade – there’ll be more clients coming to the alternative lending side who don’t qualify for traditional lending, and some of those may need to seek private lending – and Community Trust’s mission is to help as many people as possible, as much as possible. While it’s always a fun exercise to look at the environment and make educated guesses, Abbatangelo said at the end of the day all she knows for sure is what goes around comes around.

“Rates will rise, then they’ll fall, then they’ll rise again,” she said. “What’s important is that we stay informed, dynamic and make sure we always think about the best way to support our broker partners and customers.”

A privately held Canadian company in operation since 1975, Community Trust prides itself on a creative and optimistic approach to finding you the best options, executed by experienced and capable experts in the financial services field.

LATEST NEWS