23 Sep

Learn how to make your home more energy efficient


Posted by: Kristina Crosbie

The home energy makeover

Want to slash your monthly bills in half? These simple improvements will save you thousands on electricity, gas and water.

Two years ago Reiner Hoyer lived in a squat 1950s-style bungalow in the north end of Toronto. Like most houses of that era, it was drafty, poorly insulated and cost a fortune to heat and cool each year. Today the bungalow has been transformed into a two-storey home, complete with three large bedrooms, hardwood floors and a basement apartment. But despite more than tripling the size of his home, Hoyer’s utility bills are about $1,200 for the year, a third of what he spent on his old bungalow, and less than half the national average.

Hoyer, a renovation consultant, took advantage of the latest energy-saving technology to dramatically lower the cost of living in his home. He doesn’t even have a furnace: triple-paned windows, super-insulated walls and solar panels are some of the features that keep his house comfortable year round. Hoyer also cut his water bill by installing a rainwater cistern in his backyard to supply his toilets. Not only is his home one of a kind, it’s one of the most energy-efficient homes in the country.

The average homeowner spends $2,234 a year on water, gas and electricity, costs that are likely to rise as we run out of cheap energy and our power grid starts showing its age. While Hoyer may have gone to extremes, there are many cheap and easy upgrades regular homeowners can do to reduce monthly expenses. In the pages that follow, you’ll visit our energy-efficient house, where we cost out exactly how much you’ll save for each home improvement. We hope you’ll get some ideas you can put into practice. Not only will you start seeing a payback almost immediately, you’ll also add to the long-term value of your home.

Programmable Thermostats

One of the most painless ways to cut your heating and air conditioning bill is to install a programmable thermostat, says Kim Pressnail, associate professor of civil engineering at the University of Toronto. “It’s the easiest thing to install yourself.” And the payoff is fast. “For every degree in the winter you turn your thermostat down, you save about 5% on your heating bill,” he says. In the cool months, program the thermostat to drop by 3°C or 4°C when you aren’t home, and simply reverse the settings in the summer.

Air Sealing

It might surprise you that the most cost-effective solution in reducing your energy bills is the humble act of plugging air leaks. A surprising 30% to 40% of your heating or air conditioning is lost to air leakage, says Pressnail. Small gaps around wall joists, the foundation, windows, baseboards, the attic and wall sockets let air escape. They’re small, but they add up. Taken together you might have a hole the size of a basketball.

Based on Pressnail’s calculations, the air will change 10 times an hour inside a typical Canadian home, meaning new air comes in from outside that must be cooled or heated. Lowering that level can equal big savings. Sealing leaks with weatherstripping and caulking can save a homeowner as much as $108 a year or about 2.9% on their energy bills, says Walton. Considering the low cost of materials, the payback is quick. Plugs and light switches in exterior walls can also allow air in, but they can be fixed with a simple $2 gasket from your local hardware store.

Insulating the attic hatch is another important job. “The attic hatch is an outside door,” says Stephen Collette, a certified building biology environmental consultant. “Most people don’t think of it that way.” The temperature in the attic should be the same as it is outside. For this reason that hatch needs to be insulated with weatherstripping and a latch to keep it tightly closed and air-sealed.

A professional might save you more money. You can pay to have a typical home built in the ’60s or ’70s sealed for $2,000 or $3,000, says Pressnail. Best of all you can measure the improvements. The company will do an air seal test before and after the procedure so you can see it working. A professional can lower the number of air changes to as few as four an hour, saving the average homeowner about $500, or 20%, annually on their energy bill.


If your house is prone to huge temperature swings, chances are you don’t have enough insulation. Topping up the insulation in your attic and basement is an easy fix, and it’s also a cost-effective way to lower energy bills. In most cases, you want to have insulation that is at least the height of the joists in the attic, says Dave Walton, Direct Energy’s director of home ideas. You can quickly bring the insulation value up from R-20 to R-50 by blowing in some loose fill insulation on top of what’s already there. (R values measure the effectiveness of insulating materials: the higher the better.) There are even do-it-yourself kits if you’re comfortable doing the work—it’s pretty easy for the average handyman.

How much of a difference will it make? Pressnail has crunched the numbers. A 1,860-sq-ft detached two-story home built in the 1970s in Barrie, Ont.—which he says represents the average Canadian home—may have an insulation value of R-10 in the attic. Upgrading to R-50 could save a homeowner $175 a year, or about 6% of their energy use.

Fully insulating the walls of your basement will also give you some noticeable savings. Most basement walls are only partially insulated at best, so even improving the insulation on those walls to a meager R-16 value will cut total energy use by about $130 a year. If you’re thinking about doing some of the work yourself then pick up the free book Keeping the Heat In, available online from Natural Resources Canada.

Still, Pressnail advises having a professional look at your attic before you blow in extra insulation, because you have to make sure it’s air-sealed. “Inefficient buildings are wonderful at keeping assemblies (interior structures of the roof) dry since most of the warm moist air that seeps into the attic ends up leaking out in the winter. But when you add insulation and you have warm moist air from the home leaking into a colder attic space, then you have the potential for condensation.”

Most experts agree the best approach is to remove the existing insulation and start fresh. They recommend putting down a layer of spray foam first, which will air-seal the attic, then blowing in cheaper loose-fill insulation on top.


Windows offer big potential energy savings, but the payoff may not be as large as you might think: It can take 25 years or longer to recoup your investment. Quite simply, windows are expensive to replace compared with the cost to heat and cool your home. But if your windows are losing their insulating value and are due for replacement anyway, it’s worth spending the extra money for higher quality ones, explains Pressnail. For as little as 10% more, you can get windows that are at least 50% more efficient. “That is a phenomenal payback,” he says.

Homeowners should consider sealed, “low-E” argon-filled double-glazed units—or better—when installing new windows. Also consider thermal blinds as a stylish way to beef up your insulation, says Hoyer. These blinds, made by Hunter Douglas and other companies, have a honeycomb-like structure that acts like a blanket against your window. The company claims they can reduce heat loss through windows by up to 40% and cut solar heat gain by as much as 80%.

Of course if you get new windows, you want to make sure they are installed properly and air-sealed. If they aren’t, it won’t matter what quality of window you put in.


Appliances account for 14% of energy use and are the third biggest draw on hydro bills. Upgrading all your appliances to Energy Star rated systems can cut that part of your bill by as much as 30%.

New Energy Star–rated fridges cost as little as $50 a year to operate. Keeping your fridge away from heat sources, with adequate air circulation and good seals on the doors, will also lower your bills. Today’s washing machines are also much more efficient: new Energy Star models use at least 59% less energy than the minimum federal energy efficiency standards. Modern dishwashers, meanwhile, are about 30% more efficient than older models. New models typically only use about $30 of energy each year.

While some of these amounts are small, the savings add up over the appliances’ lifetimes. Over the years, a fridge will save you $85, a dishwasher up to $50, and a washing machine $672. You’ll feel good about doing your part for the environment, plus you’ll have more money in your pocket for every single month you live in your home.

Air Conditioner

Keeping cool can be expensive, especially when the average homeowner keeps the thermostat set to a frosty 22°C. If your central air conditioning system is older than 15 years it might be time to replace it, says Walton. Older units tend to have an operating efficiency of 8 or 10 SEER, or seasonal energy efficiency ratio. (You should be able to find this information printed on the AC unit.) A modern 14-SEER unit uses about 30% less electricity to operate.


If your furnace was cranking out heat in your home when Titanic was playing in theatres, it’s time for an upgrade. Furnaces have come a long way in the past 15 years. Older furnaces operate at about 60% efficiency, which means for every dollar you spend about 40 cents goes straight up the chimney. “By replacing a conventional furnace with a high-efficiency one, homeowners can save up to $500 a year,” says Walton. Also, remember to change the air filter in the furnace every three months to keep it at optimal performance.

Water Saving Devices

The truth is, there’s no financial incentive to conserve water—it’s so cheap that some municipalities don’t even charge for the stuff. Reducing hot water is where the real savings come into play, says University of Toronto’s environmental engineering chair Bryan Karney. While devices that restrict water use have been around for a while, early adopters were put off by their poor performance. Shower heads trickled, toilets didn’t flush and washers didn’t wash. However, technology has improved rapidly in the past few years; there have been significant improvements in performance and water use in everything from dishwashers to shower heads. “By and large you can use a lot less water than you thought you needed and still get a very comfortable shower,” says Karney.

Tankless water heaters, on the other hand, may not have benefits that outweigh their extra cost. Karney says these heaters work best when the hot water is used close to the unit, but in a typical house, water may have to travel several floors before it flows out of the tap.

At the same time, traditional hot water heaters have improved. Data from the Office of Energy Efficiency, a division of National Resources Canada, back that up. In fact, energy efficiency ratings of tankless and water storage heaters are almost identical these days. Given how close they are in terms of efficiency, for now you’re probably better off spending $500 upgrading to a modern hot water heater.

How long will it take to recoup all the extra money you’ll spend on energy efficient upgrades? Check out our photo gallery to find out.


This is article can be found on the moneysense website (http://www.moneysense.ca/2012/09/10/the-home-energy-makeover/)

If you want to learn more about my business please visit my website @ www.kristinacrosbie.ca or email Kristina@smithsfallsmortgages.ca

4 Sep

What do you consider the ideal mortgage?


Posted by: Kristina Crosbie

The ideal mortgage

If you’re in the market for a mortgage, you’re in luck: you’ve never had more choice. Here’s how to pick the right one.


Let’s face it, shopping for a mortgage has all the curb appeal of a pile of bricks. Who wants to compare interest rates when you could be discovering your next dream home? But picking the right mortgage is just as important as finding the perfect place to live. After all, house hunting can be intoxicating, but once the buzz wears off you still have to pay for the thing.

The right mortgage can help you pay less for your home, and pay it off faster. But to do so, your mortgage has to deliver appropriate payment options, the flexibility you need, and the right lender to work with. The wrong mortgage? Well, you could end up paying thousands more than you have to, and you could be stuck with it for years longer than you’d like. The good news is your mortgage options have never been better. We know all that choice can be confusing, but don’t worry—we can help.

The first question you’ll face is whether to lock in at a fixed rate or go with a variable mortgage, where the interest on the loan rises and falls with the prime rate. The choice you make depends on what’s important to you. For instance, with a fixed-rate mortgage, your interest rate and monthly payments will stay the same for the entire term of your loan. (Most people get a three- or five-year term, but you can lock in for 10 years or more.) At the end of the term you’ll renegotiate your rate as part of the renewal process.

The main benefit of fixed-rate mortgages is peace of mind: If rates rise, that won’t affect you. But if the prime rate drops it also means you won’t enjoy the savings. So who should consider them? Fixed-rate mortgages are a good bet if you want the ability to plan your monthly costs precisely. This is particularly useful if your cash flow is limited, or you are a real estate investor. “If you don’t like the idea that your mortgage payment will change as interest rates fluctuate, then lock in for a fixed rate,” says Rona Birenbaum, a fee-only adviser with Caring for Clients in Toronto. “Plus it will make life more comfortable for you if your income goes up over the term of the mortgage.”

Variable-rate mortgages have more risk, but they also have advantages. Variable-rate mortgages usually offer a lower initial rate than you’d get on a fixed-rate mortgage, and you stand to benefit if the prime rate drops. The risk, of course, comes when rates rise. If that happens, more of each payment will go towards paying interest, rather than paying down the principal. If rates rise sharply, your payment amount could even jump up. But there are ways protect yourself against this. “I always recommend to my clients that they establish a mortgage payment plan in which they make slightly higher payments than they have to,” says Birenbaum. Because you’re paying more than the minimum already, if the payment amount goes up, it doesn’t require a cash flow adjustment to your budget.

History presents a useful guide as to what type of mortgage to choose. “In recent years you would have been better off in variable-rate mortgages,” says Jason Heath, a fee-only financial planner with Objective Financial Partners in Toronto. “But that’s because we’ve had falling mortgage rates over the last 30 years.” Today, rates are low and they will likely rise, so there may be benefits to locking in, too.

Keep in mind that there are many other important considerations beyond the rate you pay. Ask yourself: Is the mortgage transferable? Are there prepayment privileges? How much are the fees for breaking the mortgage? Or should you even have a mortgage at all? That last question might surprise you, but if the amount owing on your mortgage is small—$75,000 or less, say— a smarter option might be to use a secured line of credit (SLOC) instead. These loans are similar to a variable-rate mortgage in that the rate is based on prime and can fluctuate, but with a SLOC, you can pay off the loan faster without penalty. “Just make sure you remain disciplined when it comes to your payments,” says Birenbaum. “Don’t just let them ride. Pay them down consistently.”

Finally, give some thought to how many extra mortgage payments you can make each year. If you think your salary may go up during the term of your mortgage, then opt for one that allows you to chip away at your principal with extra payments. In this case, open mortgages are a good option because they can be prepaid at any time, without penalty.

You don’t have the same flexibility with closed mortgages. In exchange for a better initial rate, closed mortgages limit your ability to make extra payments and cost more to break. That last factor can cost you thousands if you decide to break your mortgage or you have to sell your house.

Remember, too, that if you have equity in your home, you can arrange access to more credit than the amount outstanding on your mortgage. You only pay interest on what you actually borrow—a nice arrangement if you ever need money for maintenance, renovations or emergencies.

Whichever type of mortgage you pick, keep this one tip in mind: “Always try to choose an aggressive, but affordable mortgage,” says Birenbaum. “That will allow you to keep your other financial goals on track.” At the end of the day, there’s no one right mortgage for everyone. So make sure to sit down with your financial adviser to discuss your goals and personal situation before you make your choice.


This article can be found on the moneysense.ca website (http://www.moneysense.ca/2012/03/21/the-ideal-mortgage/)

If you want to learn more about my business please visit my website @ www.kristinacrosbie.ca or email Kristina@smithsfallsmortgages.ca