Thinking of buying while interest rates are still low? Follow these tips to ensure that your finances are ready for a long-term investment. Continue reading
Category Archives: Housing Costs
Buyers Showing Caution, Bank Keeps Rates Low
The Bank of Canada held its ground today, leaving the overnight lending rate unchanged at 1 percent. While the move was expected (the rate has been locked at this near-historic rate since September of 2010), the tone of the announcement was far less confident than previous press conferences.
The Bank’s release explained how a global economic slowdown is impacting Canada’s growth potential. While domestic factors remain strong, the Bank has trimmed back its outlook, suggeting that the economy will grow “at a pace roughly in line with its production potential in the near term.” Consumption and business investment are expected to be the main source of growth. However, the effect of lower commodity prices on Canadian incomes, combined with increasing household-debt, could cause some serious setbacks. Continue reading
Deciding on Debt: How the New Rules Will Impact Your Mortgage Hunt
Two things are clear about the current Canadian housing market. First, interest rates are going to go up. The Bank of Canada governor, Mark Carney, Finance Minister Jim Flaherty, and pretty much anyone involved in the banking industry has been warning of a hike, if not several, potentially before the end of the year. Second, the nation’s major banks have been offering absolutely amazing deals on long term fixed rate mortgages.
Which leads us to the million dollar question – is now the time to lock in a fixed rate or is a variable rate the way to go? Continue reading
Ottawa Drops the Hammer on Mortgage Rules
Back in April, FinanceĀ MinisterĀ Mark Carney remarked that “in exceptional circumstances, if there are issues that threaten financial stability, such as household debt… the bank could use monetary policy for that purpose.”
Just three months later, those exceptional circumstances have become reality.
On Wednesday, the Federal Government made their move to further tighten mortgage rules, addressing concerns over high Canadian household debt.Ā Continue reading
The Ripple Effect: How the European Financial Crisis Will Impact Canadians
News of increased financial strain in Spain today has caused the Bank of Canada to brace for a ripple effect on the other side of the ocean. Any spillover from the increasingly vulnerable European market is expected to carry over to North American, rocking the fragile U.S. banking sector before it lands on the doorstep of Canadian homeowners.
Households with high debt will be the first to feel the impact. Already debt-burdened households could begin defaulting on their mortgages as historically low rates begin to rise and Ā banks begin to tighten their lending restrictions in response to growing uncertainty. From there, it’s a domino effect of job loss, a housing freeze and decreased market action. Continue reading