The overnight rate held steady yesterday as the Bank of Canada announced that it would maintain its traget of 1 percent. This leaves the prime lending rate at 3 percent. It’s now been more than two years since the prime rate has increased, giving variable rate mortgage holders the upper hand on higher interest costs. Continue reading
Category Archives: FamilyLending.ca
Canadian Housing Market at Tipping Point
According to economists at the Bank of Nova Scotia, Canada will soon boast a more than 70 percent homeownership rate. The question now is whether or not the nation’s housing market has reached the tipping point (the United States is believed to have cracked the same 70 percent threshold just before the housing bubble burst in 2008).
Growing concern over Canada’s seemingly out-of-control housing market has already prompted Ottawa to crack down on mortgage rules. These restrictions, which include limiting amortizations to 25 years, are designed to disuade cash-strapped Canadians from taking on mortgage debt that they can’t afford. What’s more, the Office of the Superintendent of Financial Institutions has also implemented new rules that will tighten up lending regulations at financial institutions. Continue reading
How To Save For Your Down Payment
According to a recent TD Canada Trust survey, nearly 60 percent of Canadians were disappointed in the size of their down payment. These findings aren’t all that surprising; in a world of record-setting consumer debt, slim savings and lacklustre investment returns, saving for a sizeable deposit can seem like an exercise in futility. And yet, the bigger your down payment, the less interest you’ll pay, the easier it will be to refinance and you’ll enjoy lower mortgage fees. Continue reading
RBC Increases Rates And the Argument for Smaller Lenders
The Royal Bank is the first of Canada’s big banks to hike rates, increasing two of its mortgages by one-fifth of a point each this morning. RBC’s posted rate for a three-year, fixed-rate mortgage has increased 0.2 percentage points to 4.05 while their special-offer rate for a five-year closed mortgage rose to 3.69 percent.
RBC is the first major commercial bank to increase their three-year mortgage rate since late January. Competitors are currently sitting at 3.95 percent. Data from the Bank of Canada shows that five-year conventional mortgages have held steady at 5.24 percent since May. Continue reading
Carney and the Rate Game
Higher rates have been on Bank of Canada Governor Mark Carney’s mind this week. Carey signalled the chance of tighter policy on three separate occasions this week, even after keeping the key lending rate at 1.0 percent. however, Carney’s insistance that rates are on their way up sets Canada apart from other central banks that continue to look for ways to stimulate their economics amid the European debt crisis, a struggling U.S. market, and disappointing growth in China.
According to official transcripts from Carney’s interview with the BBC in London on Wednesday, the Bank of Canada feels that Canada is “in a very different place than the major crisis economies, such as the U.K.”. According to Carney, Canada’s economy is almost back to full capacity, “the labour market’s been growing, we’re growing above – we had been growing above trend, and the extent to which we continue to grow above trend, we may withdraw some of the monetary policy stimulus.” Continue reading