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Posted 3 Comments on BIG SIX BANKS finally cut Prime rate.. Well, sort of…! Bank News

BIG SIX BANKS finally cut Prime rate.. Well, sort of…!

banksters monopolyLast week, the Bank of Canada (BoC) cut their overnight rate by 0.25%.  The move surprised all the so-called ‘Financial Experts’…  (well, not me… As I had suggested rates were likely to drop in the previous week’s article and also in the previous month).

Our BIG SIX BANKS had their own surprise for us.   Instead of passing along the usual rate cut to consumers, they sat on their hands and did nothing.   In fact, TD Bank felt good about it and made public statements about how their Bank Prime rate wasn’t fully influenced by the BOC rate.     (That’s such a load of bull, you can almost smell it coming out of your screens!)

And also last week, the Banks immediately cut the rate they pay you on your savings by that same 0.25%.   Continue reading “BIG SIX BANKS finally cut Prime rate.. Well, sort of…!”

Posted Debt

Looking ahead to 2015 rates and trends

happyholidays (1) Seasons Greetings!  Happy New Year!   Quick thank you for making 2014 a great year!  Hope yours was just as special.  And I’m wishing you much success and happiness in 2015.

I’ll make this quick as I’m sure you have some New Year’s Eve celebrations to attend to.

QUICK YEAR IN REVIEW.

  • Interest rates haven’t really changed this year.
  • 5 yr fixed rates are under 3.00%.
  • Variable rate pricing improved to around Prime less 0.60% (less in some cases and dropping).
  •   In fact, looking at the big picture, interest rates haven’t really changed much in the last 4 yrs.   Yet, you wouldn’t know it by reading the newspaper headlines….(sorry to my media friends…)

Let’s get to it.  MY THOUGHTS ON 2015. Continue reading “Looking ahead to 2015 rates and trends”

Posted 1 Comment on Bi-weekly payment myth…. it won’t pay your mortgage off faster. Mortgage News

Bi-weekly payment myth…. it won’t pay your mortgage off faster.

No Mortgage Bi-weekly payments won’t pay your mortgage off faster.  Yup, it’s true.  Around 4 yrs ago, I wrote an article showing some simple but effective math to explain this.  Recently, I’ve had several readers and clients ask me about bi-weekly payments.

I thought I’d repost that article as it seemed to get a lot of attention and answered a great many questions on what it really takes to pay your mortgage off faster.

Repost from July 2010….

Back in the mid 90’s, there was a huge marketing blitz by the Big Banks that promoted making bi-weekly payments instead of the traditional monthly payments.   The sales pitch was that you could save huge amounts of money and pay your mortgage off much faster….save 4 or 5 years off your amortization…. Sound familiar?   Well, BI-WEEKLY PAYMENTS DON’T REALLY SAVE AS MUCH AS YOU THINK!

And I’ll prove it…. here’s the straight facts! Continue reading “Bi-weekly payment myth…. it won’t pay your mortgage off faster.”

Posted 3 Comments on RBC charges homeowner $8900 penalty, or 15 months interest charge! Bank News

RBC charges homeowner $8900 penalty, or 15 months interest charge!

RBC-BankPicture this… Your mortgage is with the biggest Canadian Bank in Canada.  You feel sBankstersafe.  You got a great rate at the time… 2.99%.   What could go wrong?  Well, for these clients, and hundreds others, plenty!

Check out the RBC Discharge stmnt oct 2014 showing an Interest Rate Differential (IRD) prepayment penalty of $8912 on a mortgage balance of $213,562.   Now, $8912 is a lot of money, but you’ve seen me expose even higher penalties in the past.   Penalties as high as $35,000 and $40,000.   But, put another way, that’s over 15 months worth of interest penalty being charged.   And that’s just ridiculous!

NEWS FLASH!  This type of inflated prepayment penalty calculation isn’t exclusive to RBC, the rest of the BIG SIX BANKS use a similar calculation.   And they’ve been getting away with these outrageous penalties for over 14 years!  (actually, this isn’t a new story.. I’ve been writing about these nightmare, or bankmare, penalties for years.)

Let me put this another way…. Continue reading “RBC charges homeowner $8900 penalty, or 15 months interest charge!”

Posted Consumer Debt

More disclosure.. but still no standardization of Mortgage Penalties.

Olive and harper Last week, we heard some potentially good news for Canadian consumers.  Federal Finance Minister, Joe Oliver, announced Banks would have to provide consumers more disclosure on certain products, including collateral mortgages.  We welcome more disclosure.

However, before we get too excited and give the Federal govt too much credit, let’s wait to see if this latest promise really happens.   If you are wondering why I’m so skeptical, it’s with good reason.  The Federal govt has not honored their commitments before.  And I’m talking about the promise made to Canadians to charge a fair prepayment penalty…  Remember that one? Continue reading “More disclosure.. but still no standardization of Mortgage Penalties.”