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Showing posts from 2009
Bank of Canada Governor Mark Carney again warned Canadians Wednesday not to borrow more than they will be able to handle when ultralow interest rates start to rise, urging households and lenders to be responsible while the risks that debt poses to the economy are "still manageable." "When risks are still manageable is precisely the best time to act," Carney said in the text of a speech he was delivering to a business audience in Toronto. "We must be vigilant, and all parties must fulfill their responsibilities." While saying lenders should "actively monitor risk" and not take "false comfort" from mortgage insurance and the past health of household credit, Carney implored Canadians to "ensure that in the future, when the recovery takes hold and extraordinary measures are unwound, they can still service their debts." Carney's remarks expand on the central bank's semi-annual review of the financial system last week, in wh

NET WORTH RISES ALONG WITH HOUSEHOLD DEBT

Tavia Grant wrote an article in Dec 14th Globe and Mail stating that Canadians' net worth in the third quarter of 2009 rose, but house debt rose also. Canadians' net worth swelled in the third quarter, riding the crest of rising equity markets. But debt levels rose too, sending the household debt-to-income ratio to a record high. Household net worth climbed 2.3 per cent in the quarter, as Canada's benchmark stock index ( TSX-I 11,530.88106.950.94%) gained 10 per cent, Statistics Canada said Monday. Net worth hit $5.7-trillion, marking two quarters of gains after three straight drops. Debt, too, is rising. Household debt, as measured by mortgages and consumer credit swelled 1.6 per cent as low borrowing costs caused Canadians to buy more homes and renovate them. They also bought more cars, sparking a further increase in consumer credit, the agency said. Personal debt has been steadily rising in Canada since 1982. “Falling mortgage rates, along with increased sales of exis
The 4 major banks have made slight changes in some of their posted rates over the past 2 days. Scotia has its 4 yr closed at 5.14% and 5 yr closed at 5.49% BMO has a i yr at 3.00%, 4 yr fixed at 5.14% and 6 yr closed at 5.49% TD has a 4 yr closed at 5.14 and 5 yr closed at 5.49% RBC has a 1 yr closed at 3.40%, 4 yr closed at 5.14% and 5 yr closed at 5.49% My best rate is 4 yr closed at 3.79%, 5 yr closed at 3.85% and 1 yr closed at 2.35%

Bank of Canada holds rate at 0.25%

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent. While significant fragilities remain, global economic developments have been slightly more positive and the global outlook has improved modestly relative to the Bank's projection in its October Monetary Policy Report (MPR). In Canada, as expected, the composition of aggregate demand is shifting towards final domestic demand and away from net exports. In the third quarter, the balance of these shifts resulted in weaker-than-projected GDP growth. Core inflation in recent months has been slightly higher than the Bank had projected, although total CPI inflation remains close to projections. The main drivers and the profile of the projected recovery in Canada remain consistent with the Bank's views in the October MPR. The Bank continues to expect economic growth to become more solidly entrenched

Housing Market and Ontario Economy Outlook

A recent CMHC outlook Conference recently reporeted the following: - economy has rebounded and consumer spending grown - mortgage rates are expected to stay low until well into 2010 -mortgage payments have put less of a burden on after tax income and affordibilty is very positive in Canada - house sales will continue to improve in 2010 but will rely on employment growth - Canadian saving rates have moved up due to uncertaincy about jobs etc. As the recovery continues, saving rates will start to decrease - this recession has not been as deep as the previous one - our exporting will be slow to recover as US households are saving more and consumption has decreased - Canadian consumer spending will remain low for 2010 - Walmart profits have increased significantly, indicating consumer spending awareness - 68% of Canadian mortgages are fixed term - debt consolidation is the biggest reason for refinancing at these low rates - finance, insurance and real estate sectors have seen an increase

REPORT on CANADA's RESIDENTIAL MORTGAGE MARKET

The Canadian Association of Accredited Mortgage Professionals has just released their annual survey results on how Canadians feel about housing and mortgages. 61% of those surveyed feel that now is a good time to purchase a home compared to 38% at this time last year. 77% are either satisfied or completely satisfied with their current mortgage. This has been due to the decline in rates over the past year. 42% in Ontario, 43 % in Alberta and 47% in BC feel that house prices will rise in the next year. 16 % expressed concern over job loss. Over 80% of this group have more than 20% equity in their home. 2/3 of all mortgages are for 4 or more years, with 56% having a 5 year term. The average amount of equity in a Canadian home is $142000 while those with no mortgage have $322000 equity in their home. Canadians take equity out for 2 main reasons - debt consolidation and renovations. 68% have a fixed rate mortgage while 27% have variable and adjustable rate mortgage. Fixed rates are