Negative-Yield Bonds – Pay to Save?

Katherine Martin • August 1, 2016

There is a good chance that if you skimmed the news headlines this last week, you passed right on over a piece called CIBC sells negative-yield bonds for 1st time. No one blames you, because let’s face it, stories about the Canadian bond market don’t really scream excitement. However, despite the dry subject matter, the idea of paying money in order to “save your money” is an interesting one. 

Yep, you read that right, pay money to lose money. Negative-yield bonds are bonds you purchase expecting to lose money. CIBC just raised almost $1.8 billion in six-year debts that will lose 0.009%. So why in the world would anyone do this? Well, according to the CBC News article referenced above “Investors have an appetite for such debt because the forecast for other assets is even worse. With stock returns looking dodgy due to fears about the global economy, lending money to a bank can seem appealing even if it’s guaranteed to lose a few pennies per dollar over time.”

Negative Mortgage Rates

Given the fact that mortgage rates are at an all time low, if you ever actually found yourself wondering about things like bond rates, and mortgage rates, you might question what would happen if they kept going down. Can you have negative mortgage rates? Will the bank pay you money to buy a house? Actually these questions were addressed by Bank of Canada Governor Stephen Poloz back in December of 2015.

Here are a couple articles that talk about negative mortgage rates.

Quick summary of the articles… Instead of taking a loss, the average person would probably keep their cash under their mattress… but if banks were being punished for saving, and losing value on what they keep on deposit with the central bank, they would essentially be encouraged to stop hoarding their cash… the uptick in borrowing and lending caused by negative interest rates could provide a much-needed boost to Canada’s economy.

Now, instead of putting your money into an investment that is guaranteed to lose money, it might be a good idea to look at investing in property. If you have some money to invest, the minimum downpayment required in Canada for a rental property is 20%. Rental properties are good in that they provide cash flow and appreciation. Obviously there are advantages and disadvantages to building a small rental portfolio, and the simple fear of losing money in your savings account isn’t going to push you into the market, but if it’s something you have already been thinking about, why don’t you pick up the phone and give me a call, I’d love to sit down with you and talk about some of the options you have available to you. 

Katherine Martin


Origin Mortgages

Phone: 1-604-454-0843
Email: kmartin@planmymortgage.ca
Fax: 1-604-454-0842


RECENT POSTS

Collateral vs. Standard Mortgage: Pros and Cons Explained

By Katherine Martin • December 24, 2025
Mortgage Registration 101: What You Need to Know About Standard vs. Collateral Charges When you’re setting up a mortgage, it’s easy to focus on the rate and monthly payment—but what about how your mortgage is registered? Most borrowers don’t realize this, but there are two common ways your lender can register your mortgage: as a standard charge or a collateral charge . And that choice can affect your flexibility, future borrowing power, and even your ability to switch lenders. Let’s break down what each option means—without the legal jargon. What Is a Standard Charge Mortgage? Think of this as the “traditional” mortgage. With a standard charge, your lender registers exactly what you’ve borrowed on the property title. Nothing more. Nothing hidden. Just the principal amount of your mortgage. Here’s why that matters: When your mortgage term is up, you can usually switch to another lender easily —often without legal fees, as long as your terms stay the same. If you want to borrow more money down the line (for example, for renovations or debt consolidation), you’ll need to requalify and break your current mortgage , which can come with penalties and legal costs. It’s straightforward, transparent, and offers more freedom to shop around at renewal time. What Is a Collateral Charge Mortgage? This is a more flexible—but also more complex—type of mortgage registration. Instead of registering just the amount you borrow, a collateral charge mortgage registers for a higher amount , often up to 100%–125% of your home’s value . Why? To allow you to borrow additional funds in the future without redoing your mortgage. Here’s the upside: If your home’s value goes up or you need access to funds, a collateral charge mortgage may let you re-borrow more easily (if you qualify). It can bundle other credit products—like a line of credit or personal loan—into one master agreement. But there are trade-offs: You can’t switch lenders at renewal without hiring a lawyer and paying legal fees to discharge the mortgage. It may limit your ability to get a second mortgage with another lender because the original lender is registered for a higher amount than you actually owe. Which One Should You Choose? The answer depends on what matters more to you: flexibility in future borrowing , or freedom to shop around for better rates at renewal. Why Talk to a Mortgage Broker? This kind of decision shouldn’t be made by default—or by what a single lender offers. An independent mortgage professional can help you: Understand how your mortgage is registered (most people never ask!) Compare lenders that offer both options Make sure your mortgage aligns with your future goals—not just today’s needs We look at your full financial picture and explain the fine print so you can move forward with confidence—not surprises. Have questions? Let’s talk. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you make smart, informed choices about your mortgage. No pressure—just answers.

Mortgages Aren’t One-Size-Fits-All

By Katherine Martin • December 17, 2025
Why the Cheapest Mortgage Isn’t Always the Smartest Move Some things are fine to buy on the cheap. Generic cereal? Sure. Basic airline seat? No problem. A car with roll-down windows? If it gets you where you're going, great. But when it comes to choosing a mortgage? That’s not the time to cut corners. A “no-frills” mortgage might sound appealing with its rock-bottom interest rate, but what’s stripped away to get you that rate can end up costing you far more in the long run. These mortgages often come with severe limitations—restrictions that could hit your wallet hard if life throws you a curveball. Let’s break it down. A typical no-frills mortgage might offer a slightly lower interest rate—maybe 0.10% to 0.20% less. That could save you a few hundred dollars over a few years. But that small upfront saving comes at the cost of flexibility: Breaking your mortgage early? Expect a massive penalty. Want to make extra payments? Often not allowed—or severely restricted. Need to move and take your mortgage with you? Not likely. Thinking about refinancing? Good luck doing that without a financial hit. Most people don’t plan on breaking their mortgage early—but roughly two-thirds of Canadians do, often due to job changes, separations, relocations, or expanding families. That’s why flexibility matters. So why do lenders even offer no-frills mortgages? Because they know the stats. And they know many borrowers chase the lowest rate without asking what’s behind it. Some banks count on that. Their job is to maximize profits. Ours? To help you make an informed, strategic choice. As independent mortgage professionals, we work for you—not a single lender. That means we can compare multiple products from various financial institutions to find the one that actually suits your goals and protects your long-term financial health. Bottom line: Don’t let a shiny low rate distract you from what really matters. A mortgage should fit your life—not the other way around. Have questions? Want to look at your options? I’d be happy to help. Let’s chat.
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