Showing posts from 2010


The Bank of Canada did as expected yesterday and announced it is increasing the target for the overnight rate by 0.25% to 0.75%. There was some debate earlier in the month whether the central bank would actually continue increasing interest rates, but after the strong job report that was released mid-month announcing that a record number of jobs were created in June, it became apparent that Bank Governor Mark Carney, now had strong justification to increase rates again. Some key items in the release included: Globally Global economic recovery is proceeding but is not yet self-sustaining Greater emphasis on balance sheet repair by households, banks, and governments around the world is expected to reduce global growth then the Bank originally believed back in April The response to the European debt crisis, or Greece’s debt crisis, has reduced the risk of it blowing out of proportion, but it will slow down global growth US consumer demand is increasing but is still not driving growth In C


IMF says Canada will likely outperform this year, sees slower growth in 2011 Thu Jul 8, 9:57 AM Joe Mcdonald, The Associated Press Email StoryIM StoryPrintable View.By Joe Mcdonald, The Associated Press BEIJING, China - Canada's economy is on track to grow more quickly this year than previously expected, putting it ahead of the United States and most other advanced economies, according to new estimates from International Monetary Fund. The IMF said Thursday it's raising the 2010 growth forecast for Canada to 3.6 per cent from its previous estimate of 3.1 per cent, issued in April. The IMF's July report also raised its U.S. growth estimate to 3.3 per cent, up from 3.1 per cent and its world estimate to 4.6 per cent from 4.2 per cent. Asian countries with rapidly maturing economies will grow more quickly than the United States, Japan and European countries that have historically been more advanced. China's growth for this year, for instance, is now projected at 10.5 per c

The Case For A Variable Rate When Rates Are Rising

It’s been a great ride! Canadian homeowners have been benefiting from ultra-low interest rates over the last two years. Unfortunately the time has come: the rate climate is starting to heat up. As the Prime lending rate starts to gradually increase toward more normal lending rates of 5% to 6%, do variable-rate mortgages still make sense? Of course the answer depends on your own personal situation, but there are definite compelling reasons to choose variable. Fixed-rate mortgages play a significant role with many Canadian homeowners, particularly those who may lose sleep wondering what will happen next with rates. Fixed mortgages are also ideal for those on a very tight budget; a fixed rate gives you the security of knowing exactly how much your mortgage will be so you can plan accordingly. Many first-time homebuyers choose a fixed-rate mortgage for this reason For those who are not on a tight budget, a variable-rate mortgage can be a wise financial move, even in a rising rate environme


Bank of Canada raises interest rate | Tuesday, 1 June 2010 After more than a year at a record low level, Bank of Canada Governor Mark Carney raised the benchmark interest rate for the first time since 2007 by one-quarter percentage point to 0.5 per cent. This is the first time since 2007 that that rate has increased and the Bank of Canada is the first in the Group of Seven to do so since the financial crisis and recession began in 2008. In a statement Carney emphasized that the increase should not be interpreted as just the first of more to come. "This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery,'' the central bank said. ``Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and g


The Canadian Press Date: Thursday Feb. 11, 2010 6:56 AM ET OTTAWA — The federal government should avoid major surgery and make only minor adjustments to deal with fears of overheating in Canada's housing market, a number of leading economists said Wednesday. Federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concern that Canadians may be assuming too much debt in home purchases, debt that could rebound on them when interest rates rise. But some solutions being floated in advance of Flaherty's upcoming March 4 budget -- doubling the minimum down payment to 10 per cent, or reducing the maximum amortization period from 35 to 30 years -- could do more harm than good, the economists said. "We want some sort of micro-surgery, not (taking) a pickaxe to the problem," said Avery Shenfeld, chief economist with CIBC World Markets. Bank of Nova Scotia economist Derek Holt said such radical surgery could cause home prices to crash and shake confidence in t
Two items of interest. 1) This past Tues. The Bank of Canada quarenteed to keep its trend-setting rate at 0.25% until the end of June. The implication was there to expect rates to rise after that. If you have a mortgage that is coming up for renewal or are looking to purchase soon, now is the time to give us a call to see how we can help. 2) Street Capital has rolled out the first nationally available 1-year adjustable rate mortgage. Paul Grewal, President of Street Capital, says the product is well-suited to those who expect that “discounts on ARM’s will increase.” It gives people “the flexibility to choose a shorter ARM term,” he adds. Therefore, if you think variable rates will be prime – 0.50% next year, for example, this 1-year variable lets you switch mortgages in 12 months without penalty--instead of waiting 3-5 years. Street Capital also lets customers convert to a 3-, 4- or 5-year fixed rate at any time, with no fee, and at discounted broker rates. Here are some of the key gui
Canada Prepared For Rising Rates according to a recent surrvety bay CAAMP. Claims that Canadians are taking out risky variable-rate mortgages and borrowing more than they can afford “are not based on actual data” and “are misinformed.” That’s according to CAAMP , who issued this study of 40,000 mortgages from 2009: Revisiting The Canadian Mortgage Market… Despite rising home prices, first-time mortgagors took out “far less” than they could afford last year, says CAAMP. "The vast majority of Canadian mortgage borrowers are not taking on undue risks. They have factored rising interest rates in to their mortgage decisions," stated Jim Murphy, president and CEO of CAAMP. CAAMP ran simulations to estimate what would happen if the Bank of Canada hiked rates 3% over two years (and fixed rates rose 1.25%). It found that income gains should offset much or all of the increases in mortgage payments that most Canadian’s would experience. "The bottom line from the simulations is th