You wouldn’t go skydiving without a parachute, or walk across a tightrope without a safety net, yet thousands of people buy homes in Canada each year without an emergency fund safely tucked away in the bank. When you take out a mortgage with no savings, you’re flirting with disaster. An unexpected job loss, drop in income, home repair, medical situation or divorce could spring up out of nowhere, causing you irreversible financial strife. No one every expects this kind of misfortune, but that doesn’t mean you shouldn’t prepare for it. It’s always better to be safe than sorry, especially when it comes to your finances. A cushion of at least three months living expenses is just the start. Continue reading
Tag Archives: Mortgage Rates
Bank Holds Overnight Rate at One Percent
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
Loophole May Make Credit Unions the Better Mortgage Option
New mortgage guidelines aimed at Canada’s sizzling real estate market might not be as ironclad as Finance Minister Mark Carney may have hoped. That’s because credit unions, which are provincially regulated, are not under the jurisdiction of the Office of the Superintendent of Financial Institutions (OSFI). This loophole may provide community credit unions with an important competitive advantage and borrowers with an attractive alternative to traditional lending sources. 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