Author Archives: Editor

How Age is Impacting the Housing Market

It used to be that buying a home was a solid investment in your retirement. Simply purchase a fixer-upper, restore it to it’s former glory, incorporate some modern amenities, and presto-changeo: 20 years from now you’ve got yourself a nice, big next egg. However, things have changed, leaving many mature homeowners facing a frustrating reality.

According to the Bank of Montreal, about a third of Baby Boomers plan to sell their home to fund their retirement. Unfortunately, the questions remains as to whether or not there will be enough buyers capable of purchasing these properties as more and more seniors begin to downsize. An oversupply of houses could ultimately result in a price plunge, leaving many retirees high and dry. Continue reading →

Could Interest Rates Go Lower?

Interest rates have no where to go but up, right?

Maybe, but maybe not. Bank of Canada governor Mark Carney signalled last Tuesday that he’s still looking to raise the cost of borrowing “over time,” however, it appears to be an empty threat. The overnight rate has remained unchanged for months as Canadian home hunters continue to take advantage of a stable 1 percent borrowing rate.

In fact, some lenders are even considering dropping their mortgage rates below the current record lows. Rob McLister, editor of Canadian Mortgage Trends was quoted in the Financial Post insisting there is “no question rates [could] go potentially lower.”

While the prime rate tracks the overnight lending rate, it doesn’t limit how low banks can actually go with their mortgage products. Many mortgage brokers are also willing to cut their commission in order to buy down rates as they compete against larger lending source. If you’re currently on the market for a great rate, consider this: there are plenty of fix-year, fixed-rate closed mortgages available at 2.99 percent. Continue reading →

Explaining Foreclosures in Canada

Found yourself in a financially tough spot? Having trouble making your monthly mortgage payments? Be careful – foreclosure could be around the corner. While it is generally in the interested of both the bank and you, the borrower, to avoid foreclosure proceedings, sometimes there is no other option.

A number of things happen when a homeowner defaults on their mortgage. Of course, the first step is to try and get your mortgage payments back on track. If your financial problems are temporary, you might be able to arrange some concessions on your payment schedule. However, I wouldn’t hold your breath. If a resolution isn’t reached, the bank will take steps to recover their debt. The most common forms include a Power of Sale and a Judicial Foreclosure. Continue reading →

Canadians More Cautious About Household Debt?

The Bank of Canada has been repeating warnings about dangerous household debt levels for months, however data released on Tuesday shows that people might finally be starting to get the message. The central bank noted that consumer spending has been “moderate” as of late, suggesting that Canada’s craving for credit could be beginning to subside.

The Bank of Canada’s third-quarter monetary report also touched on a new plan for interest rates, pushing back the timing of an increase, while at the same time warning that a boost could occur in order to dissuade individuals from taking on additional debt.

Tuesday’s release was the first time that Ottawa’s policy makers linked household debt to interest rates. According to the report, “imbalances in the household sector” has become a factor that could force an increase in the Bank of Canada’s current setting of one percent.  Continue reading →

Should You Invest in Real Estate?

Does the thought of investing in real estate appeal to you? Well, now could be the perfect time to take the leap into the rental investment arena. The continued strength of the nation’s real estate market, along with the expectation that interest rates will remain low, should provide plenty of appeal for investors looking to ramp up their real estate portfolio.

According to a recent report released by Bank of Montreal Economics, there are a plenty of advantages to investing in commercial Canadian properties. Earl Sweet, senior economist and managing director at BMO Capital Markets has stated that “After a severe and protracted market downturn in the 1990s, the commercial real estate industry in Canada has been characterized by cautious development and prudent lending practices.” This calculated approach has enabled the sector to reamin extremely attractive to investors. Continue reading →