If you’re a regular reader of this site, you’ll know I’ve been very skeptical and critical of the Bank of Canada (BoC) for continuing to increase interest rates. It just hasn’t made sense.
The BoC raised rates FIVE TIMES between July 2017 and October 2018. That’s a 1.25% increase. For anyone with a $300,000 mortgage, your payment increased by $189 per month. Or, to put it another way, for every $100,000 of mortgage, your payment went up by around $63 per month.
Yet, we kept hearing that the BoC wanted to raise rates further. Economists and other experts were saying we should expect more rate increases by the end of 2018! Wow!
Continue reading “Remember when I said rates could go down, not up?!”
Last Wednesday, the Bank of Canada (BoC) raised its overnight target rate to 1.5% – up from 1.25%. This is the fourth increase since last June, when the target rate was 0.5%.
The timing is suspect to me. Last year, we had an increase around this time, but that was coming off of the hottest housing market in 29 years. We’re currently on the heels of a brutally slow spring market, yet rates are still rising? I don’t get it… this is a poor decision, in my opinion.
When it comes to four rate increases in the past year, there are facts, realities and perceptions that come into play… Continue reading “Why Did the Bank of Canada Raise Rates Last Week?!”
Much has been written about last week’s Posted rate hikes by TD and RBC. Don’t panic! This is just their posted rate – it’s not the actual rate they give to clients.
I do, however, think we’ll see a minimal rate hike in the coming weeks due to five-year Government of Canada bond yields increasing slightly. Fixed rates are priced closely to bond yields.
Continue reading “TD & RBC raised the POSTED rate… but not their REAL rates”
Canada’s a nation of immigrants. It truly is the land of opportunity. Chances are, your parents, grandparents or great grandparents came here from another country.
There are many reasons why people left their homeland. Some left by choice to pursue a better life. Others had to leave for safety reasons. Whatever the reason, most of us have a common goal: A better life.
Homeownership has always been an important part of that dream. We want to own something. We want to plant roots. There’s a pile of statistics to support this claim. In my 28 years in the financial services industry, I can attest to this claim.
Continue reading “Yes, you can still buy a home in Canada… Keeping the dream alive”
Rates have been rising gradually over the past six months following several years of historically-low rates. There should be no surprise that rates are rising – it was bound to happen. But, we can be thankful they’re not predicted to spike. It’s much easier to deal with – and plan for – gradual increases.
Benjamin Tal, Deputy Chief Economist of CIBC World Markets Inc, spoke last week about his predictions for rates and a bunch of other economic indicators. I’ve been following him for 15 years now. He’s one of the few economists whom I respect, as his forecasts have proven very accurate. So, let’s pay attention!
Continue reading “Interest Rates are Rising… and Expected to Continue… But!”
It’s begun. The message is starting to sink in. The new mortgage rules could eliminate 15% of Canadians from qualifying for a mortgage after January 1st, 2018. The mad rush has started as mortgage inquiries are up significantly.
WHO WILL BE AFFECTED?
- Anyone that has a mortgage renewal in next 12 to 20 months.
- Anyone thinking of buying in the next 12 months.
- Anyone that is needs or is thinking of refinancing their mortgage in the next 12 months.
- Rental property owners. Yes, you too.
- Future retirees with lots of home equity (newsflash..the new rules don’t take into consideration how much equity you have in your home.. your net worth is also irrelevant… it’s all about how much income you earn and declare…)
All of these borrowers will be affected. If you’re not getting the message, anyone with a mortgage should be getting a review done NOW. Don’t wait until next year. You may not qualify for a mortgage.
EXPECT HOME SALES TO SPIKE UP TEMPORARILY Continue reading “Review your mortgage NOW! Next year may be too late.”
Yesterday, the U.S. Fed Chairman, Ben Bernanke, announced he ‘could’ start to ease their stimulation of the economy later this year. That small announcement has had a huge impact on the global stock markets and bond yields. Stock Markets are down around 2.00% around the world as of 2.30pm today.
The U.S. has been buying around $85billion worth of bonds every month in an attempt to keep interest rates low. And with that simple announcement yesterday, the world’s markets have reacted. Bond yields have started to climb…
Our own 5 yr Govt of Cda bond yield is up to 1.75%. That’s up around 10bps from yesterday, and up 60bps from the beginning of May. In fact, we haven’t seen these levels since October 2011 and again in March 2012. We already received warnings from our Lenders that wholesale mortgage rates are likely to go up. Remember, bond yields affect Fixed mortgage rates.. but they will have an indirect affect on Variable rates, too. Continue reading “When the U.S. sneezes, Canada gets a cold… I’m getting the sniffles…mortgage rates are headed up.”