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.”
Last week, CBC’s Kathy Tomlinson made national headlines with her breaking story about TD charging car loan interest rates of 25%. Wow! Are you kidding me? The reaction was incredible and went viral. Over 4000 comments in just a few days.
Now, this doesn’t have anything to do directly with mortgages, but it’s relevant news given that TD is one of the largest BANKs in Canada. It also shows our Federal Govt’s lack of focus when it comes to different types of consumer debt. This should serve as a reminder that a BANK is a business. They aren’t your best friend. They want to maximize profits and are accountable to its shareholders.
The article reports that TD has approximately $14.3billion of indirect loans on its books brokered by dealers. With an estimated 25% of these loans being priced at subprime rates (subprime means higher rates for riskier borrowers), that would work out to around $500million in interest costs being collected by TD each and every year! Continue reading “TD car loan rates at 25%!! Over 4000 comments!”
Yesterday, we saw our Federal Minister of Finance, Jim Flaherty, admit to having his office phone up Manulife Financial and ask them to stop advertising their 2.89% 5 year fixed rate mortgage special. An unprecedented move for a government official… Yes, it’s true! But wait, it gets better (or worse). Flaherty admitted to calling up BMO personally, to ask them to stop advertising their 2.99% 5 year fixed rate (NO FRILLS mortgage). click here for the article.
Now, just a comment about these products and rates…. if you are a regular visitor to CanadaMortgageNews.ca then you’ll know the BMO low-rate (or NO FRILLS to be more accurate) is a terrible product with too many restrictions and limitations… Manulife has a decent product….rate is competitive, however, like most other Bank’s, there is some mystery about what their best rates really are… so once again, you can’t rely on a website or bank advertising when it comes to finding the best mortgage…a mortgage broker is the best way to get unbiased advice with access to dozens of Lenders. Continue reading “Canadian Govt doesn’t want you to find the lowest mortgage rate.”
So here we go again.. More stats that show our personal debt levels aren’t out of control… That’s right, I said ‘aren’t’ out of control. Equifax Canada says our defaults are at record low levels and we are paying off our debts faster. This doesn’t come as any surprise to me. Anyone that’s followed my posts knows that I have questioned all the popular articles telling us we are not managing our debts responsibly.
You’ve seen the reports… ‘Personal debts at record high levels’…..’Personal Debt crisis’. We’ve been hammered with the same headlines for the past few years. I just wasn’t seeing this with my readers or my clients… I kept seeing consumers wanting to take advantage of these record low interest rates to invest or improve their homes (why is that a bad thing?). That’s not bad debt in my opinion… that’s good debt.. And now we have some stats to back up what I have experienced. Continue reading “Personal Debt level concerns are overblown according to Equifax stats.”
The Federal govt controls hi-ratio mortgage lending…. (mortgages that are greater than 80% loan to value)… There is a $600 billion limit for Canada Mortgage and Housing Corporation (CMHC… a federal corp). And a $250 billion limit for Genworth Financial Canada (a private corp).
Last year, the govt reported CMHC was fast approaching it’s $600 billion limit and that it had no intentions of increasing that limit. Then last month, the federal govt announced they would increase Genworth’s limit to $300 billon. This gives Canada’s mortgage lenders some breathing room as it now appears as though there is enough room to cover mortgages for a few years…
WHY YOU SHOULD PAY ATTENTION Continue reading “Genworth Financial $50billion increase is good for Consumers”