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Tag5 year fixed rate

Rental properties as a secure long-term investment

Warning: More Rate Hikes To Come

Tomorrow will be the 7th rate announcement from the Bank of Canada this year. Of the last 6 announcements, 5 have resulted in rate hikes. Big rate hikes. Rate hikes we haven’t seen yet this century. To put things into perspective, most announcements we’ve seen in the last 12 years haven’t resulted in any movement to rates at all. And when they have, it’s been by no more than 0.25% (up or down).

Not only is it unheard of to announce 5 rate hikes in a row; but these rate hikes have reached as high as a full percentage point. Ludicrous. After 5 unprecedented increases, you would think that rates would plateau. 

Unfortunately I’m here to tell you that we’re not quite out of the woods. Yet.

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How To Navigate Today’s Economy

Rumour has it the worst is yet to come. On October 26th, Bank of Canada Governor Tiff Macklem will very likely increase rates by another 0.50%. Not only will this push the bank prime rate up to 5.95% – it could lead to the average 5-year fixed rate mortgage well above 6.00%. What a mess. As I mentioned in my previous article, the BoC made a critical error and the Canadian people are continuing to pay for it. 

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A Broken Promise Leads To A Broken Economy

The Bank of Canada has always avoided forecasting rate hikes and rate cuts. It’s always been a closely guarded secret left to speculation – that is, of course, until July 2020. In what might have been the first announcement of its kind in the history of the BoC, Governor Tiff Macklem publicly stated that “interest rates are low and will stay low for a long time.”

The central bank didn’t anticipate having to raise rates until 2023 and for some reason made a choice to communicate that to Canadians. Naturally, Canadians made financial decisions accordingly. Big financial decisions. All on the basis of a promise made by a government institution they knew and trusted.

As we’re now learning, that promise was impossible to keep.

Continue reading “A Broken Promise Leads To A Broken Economy”

The 3 Questions I Get Asked Most About Rising Rates

It’s no secret to anyone reading this: rate hikes have gone off the rails. On September 7th, the Bank of Canada announced yet another whopping increase of 0.75% leaving economists scratching their heads. Typically rates increase or decrease by 0.25%, if they change at all. Inflation has forced the BoC to make some pretty drastic decisions… but have they gone too far? 

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Death, Taxes, and Interest Payments: Part 2

There are some things in life you can’t avoid, but only two things you can’t avoid paying for: taxes and interest payments. In Part 1 of this series, we looked at owning a rental property as a great way to build your net worth while reducing your taxes. Now, in Part 2, we’ll be turning to interest payments. 

Interest payments are a pain to deal with but a necessary evil nonetheless. Here are a few ways to make them a little less painful. 

Continue reading “Death, Taxes, and Interest Payments: Part 2”