Royal Bank and TD Canada Trust announced Monday March 28 they are increasing several mortgage rates by up to 6/10ths of a percentage point.
The biggest jump is attached to the popular five-year fixed closed rate, which moves from 5.25 per cent to 5.85 per cent at both banks. That's the posted rate, which is routinely discounted by the big banks.
RBC's new discounted rate for the five-year term also rises 6/10ths of a percentage point to 4.59 per cent. TD's rises the same amount to 4.55 per cent.
Both banks also raised their three-year and four-year fixed closed rates. The posted three-year rate at Royal Bank climbs one-fifth of a percentage point to 4.35 per cent, while the posted rate at TD jumps 4/10ths of a point to 4.70 per cent.
The posted four-year rate at both banks jumps 4/10ths of a percentage point to 5.34 per cent.
Other banks are expected to follow suit. The new rates, effective Tuesday, represent the first hike in Canadian mortgage rates since last October.
Variable mortgage rates, which rise in tandem with the Bank of Canada's key overnight lending rate, are unchanged. But they are likely to be heading up soon too.
Bank of Canada governor Mark Carney warned last week that inflation was higher than expected. That had some market watchers forecasting that the central bank could move to raise its key lending rate as early as June.
The key rate has been at a rock-bottom 0.25 per cent since April 2009 to help the economy recover.
Fixed-rate mortgage rates tend to move higher when long-term bond yields rise.
A survey released last week by RBC found almost two-thirds of respondents expected the cost of servicing a mortgage to rise this week.
Monday, March 29, 2010
Thursday, March 18, 2010
Everyone should keep his or her own credit history
I came across the article below from last month’s Globe and Mail and could not agree more with the author. But I will take it a step further. EVERYONE should keep and maintain his or her own credit history – even if you are adverse to debt of any kind.
Even if your credit history is in bad shape right now – don’t give up on it – time is your friend – and all the open wounds and scars from the past will disappear in time.
I advocate every young person begins establishing his or her credit history as soon as they turn 18 – and to consciously manage and build it so that by the time they hit their twenties, they will not be impeded in their efforts to buy or lease a car; rent an apartment; secure a mortgage; apply for a line of credit; apply for that sexy credit card loaded with rewards features, etc. etc.
Some people admirably live their lives without any use of credit – they go by the philosophy, if I don’t have the money – I ain’t buying it.
I had two thirty something clients in the office the other day who had no credit history at all. They had saved $120,000, and owned their own cars, and were quite self sufficient. They decided it was time to buy their first home together.
Let me tell you, that was a difficult mortgage to place – they qualified in all other respects – but no credit history means lenders cannot assess your willingness and ability to repay a debt obligation – even if logic dictates that clearly you are solid people.
The article below focuses on couples – and the need for both to establish their own individual credit histories – especially true when one partner makes a larger income, and credit applications are traditionally keyed on that person – with perhaps the lesser income person tagging along with a supplementary card.
Couples should keep their own credit histories
By Angela Self
From The Globe and Mail February 09, 2010
Even if you're happily coupled, you need credit in your own name. Start building it today.
I made a common money mistake in my early 20s: I combined all of my finances with my live-in boyfriend's. It seemed like the smart thing to do at the time. As it turned out, not so much.
After we separated, I could not qualify for even a credit card in my own name. Even though I co-owned a condo and made regular payments on our joint card, I had not built up any credit history of my own. As far as the banks were concerned, I did not have a financial identity.
I'm not alone in this one. I have met many couples who combine all areas of their finances, including credit cards, lines of credit and bank accounts.
Having a joint account is important for couples. It's a place to funnel money for shared expenses and common goals. However, having an individual account and credit in your own name is equally important.
It's not about hiding purchases from your partner, as you should each know what's coming into and what's going out (dollar-wise) of all accounts. Rather, it's about maintaining a level of independence, financial identity and know-how.
Bottom line: Even if you're happily coupled, you need credit in your own name. Start building it today.
Angela Self is one of the founders of the Smart Cookies money group. Read her biweekly column on managing debt and saving money at globeinvestor.com [http://www.theglobeandmail.com/globe-investor].
Wednesday, March 17, 2010
Owning up to your debts spells relief
In the past two weeks, I have attended more than thirty insolvency counselling sessions with clients who have recently either declared bankruptcy or entered into consumer proposals. By law, anyone entering into one of these debt solutions MUST attend two credit counselling sessions over the next few months after the initial program begins.
The thirty clients were a mix of first and second counselling sessions. I always speak off the record with each of the people to learn more about them, their circumstances, and their future.
In EVERY case, that is 30/30 there are no regrets about taking this important step forwards - the sense of relief is palpable and a sense that there is a light at the end of the tunnel, and they are not simply handing over all their excess income to their creditors each month, but still getting no farther ahead.
These people come in all shapes and sizes. Many are single parents; some are homeowners; some have battled illness; poor investments, bad luck or bad business decisions. Some lost their jobs due to the recession, or their business may have gone under due to the recession.
Whatever the reason, they decided the music had stopped playing, and it was time to face up to their reality. One gentleman today has weathered major illness for both he and his wife; lost his job three months ago, and has been struggling with debt problems his whole life. He is 69 years old ! Finally, he said enough is enough, and he walked in and out of the meeting with a spring in his step and a smile on his face - said it's the happiest he has been in years.
Another gentleman came to the meeting direct from a chemo session - he was also remarkably upbeat - not withstanding his very serious prognosis. He wants to make sure he does not leave behind a mess for his estate/kids to deal with - he is hoping he will make a full medical recovery, but if that is not god's will, at least he will go out on his terms with a clear consciense.
It makes me feel good to be a part of an industry that can do so much good for people in financial distress, and to live in a country where we truly can get a second chance.
Ross Taylor
rosst@rosstaylor.org
The thirty clients were a mix of first and second counselling sessions. I always speak off the record with each of the people to learn more about them, their circumstances, and their future.
In EVERY case, that is 30/30 there are no regrets about taking this important step forwards - the sense of relief is palpable and a sense that there is a light at the end of the tunnel, and they are not simply handing over all their excess income to their creditors each month, but still getting no farther ahead.
These people come in all shapes and sizes. Many are single parents; some are homeowners; some have battled illness; poor investments, bad luck or bad business decisions. Some lost their jobs due to the recession, or their business may have gone under due to the recession.
Whatever the reason, they decided the music had stopped playing, and it was time to face up to their reality. One gentleman today has weathered major illness for both he and his wife; lost his job three months ago, and has been struggling with debt problems his whole life. He is 69 years old ! Finally, he said enough is enough, and he walked in and out of the meeting with a spring in his step and a smile on his face - said it's the happiest he has been in years.
Another gentleman came to the meeting direct from a chemo session - he was also remarkably upbeat - not withstanding his very serious prognosis. He wants to make sure he does not leave behind a mess for his estate/kids to deal with - he is hoping he will make a full medical recovery, but if that is not god's will, at least he will go out on his terms with a clear consciense.
It makes me feel good to be a part of an industry that can do so much good for people in financial distress, and to live in a country where we truly can get a second chance.
Ross Taylor
rosst@rosstaylor.org
Frantic housing market ready for calm
Supply shortages still expected in big centres, but wave of new listings elsewhere will be boon to buyers
STEVE LADURANTAYE From Tuesday's Globe and Mail Published on Tuesday, Mar. 16, 2010 12:00AM EDT
After a historic runup in prices, the Canadian resale housing market is set to cool down as a wave of new listings hits the market, providing badly needed inventory for hungry buyers. The number of homes on the market nationally increased for the third consecutive month in February on a seasonally adjusted basis, according to the Canadian Real Estate Association. The industry group said yesterday there were 4.7 months of inventory available in Canada in February, up from 4.5 months in January. That trend has put buyers and sellers in an equilibrium not seen since before the market downturn began about two years ago.
The ratio of new listings to sales, an indicator used by analysts to gauge the health of the resale housing market, left the "favourable to sellers" range to the "balanced market" range in February, according to National Bank Financial. It's a sign of stability for a sector that has seen wild price appreciations as buyers competed ferociously for the few homes on the market. "Further expected supply increases will continue to take the steam out of housing markets as the year progresses," said Gregory Klump, chief economist at the Canadian Real Estate Association. "There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising."
More listings help prevent bidding wars and could slow house-price gains this year. The association expects prices nationally to decline slightly next year. Still, some major markets such as Toronto and Vancouver will be slower to add listings this year, industry officials said. "You still see a supply shortage in the big centres because the people who need to sell and move up just don't see anything they want to buy," said Phil Soper, president of Royal LePage. "But we're ahead of the curve on new listings in February, and March will be absolutely critical if that trend is to continue."
The Monday following Ontario's March Break is traditionally the busiest listing day in Canada, as the weather turns favourable and parents who will need to relocate their children realize the school year is coming to an end. "That's the day everyone puts on their game face and gets chopping," Mr. Soper said. "It happens every year - it's like the summer blockbuster season." The busy spring will have consequences, however. Many of the homes will be put on the market earlier than in other years as owners look to cash in on the hot market. The flurry of activity is expected to dampen sales in the last half of 2010. "I think we'll see a sharp up-tick in sales, followed by a massive pullback," said TD Bank economist Millan Mulraine. "We're taking sales from the end of the year and moving them up. Then you should see a market that is more in line with fundamentals."
In the meantime, the number of home sales continued on a tear in February with a 44 per cent year-over-year gain from recessionary lows a year ago, CREA figures showed. The average price of all homes sold on the Multiple Listings Service in February was $335,655, up 18.2 per cent from a year ago. The relentlessly strong price gains since last year's lows have fuelled worry about the formation of an asset bubble. Finance Minister Jim Flaherty is watching the country's mortgage market carefully but does not believe there is a housing bubble, he said in an interview with Bloomberg.
Anything that helps prices stabilize would be a welcome development for policy makers, who are taking steps to make it more difficult to qualify for a mortgage in a bid to cool off the market. While more listings are expected this year, buyers are expected to be out in full force for the foreseeable future. Buyers are expected to rush into the market in the coming months to avoid changes to mortgage application rules in April, anticipated higher interest rates by midsummer and the introduction of harmonized sales taxes in Ontario and British Columbia in July.
STEVE LADURANTAYE From Tuesday's Globe and Mail Published on Tuesday, Mar. 16, 2010 12:00AM EDT
After a historic runup in prices, the Canadian resale housing market is set to cool down as a wave of new listings hits the market, providing badly needed inventory for hungry buyers. The number of homes on the market nationally increased for the third consecutive month in February on a seasonally adjusted basis, according to the Canadian Real Estate Association. The industry group said yesterday there were 4.7 months of inventory available in Canada in February, up from 4.5 months in January. That trend has put buyers and sellers in an equilibrium not seen since before the market downturn began about two years ago.
The ratio of new listings to sales, an indicator used by analysts to gauge the health of the resale housing market, left the "favourable to sellers" range to the "balanced market" range in February, according to National Bank Financial. It's a sign of stability for a sector that has seen wild price appreciations as buyers competed ferociously for the few homes on the market. "Further expected supply increases will continue to take the steam out of housing markets as the year progresses," said Gregory Klump, chief economist at the Canadian Real Estate Association. "There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising."
More listings help prevent bidding wars and could slow house-price gains this year. The association expects prices nationally to decline slightly next year. Still, some major markets such as Toronto and Vancouver will be slower to add listings this year, industry officials said. "You still see a supply shortage in the big centres because the people who need to sell and move up just don't see anything they want to buy," said Phil Soper, president of Royal LePage. "But we're ahead of the curve on new listings in February, and March will be absolutely critical if that trend is to continue."
The Monday following Ontario's March Break is traditionally the busiest listing day in Canada, as the weather turns favourable and parents who will need to relocate their children realize the school year is coming to an end. "That's the day everyone puts on their game face and gets chopping," Mr. Soper said. "It happens every year - it's like the summer blockbuster season." The busy spring will have consequences, however. Many of the homes will be put on the market earlier than in other years as owners look to cash in on the hot market. The flurry of activity is expected to dampen sales in the last half of 2010. "I think we'll see a sharp up-tick in sales, followed by a massive pullback," said TD Bank economist Millan Mulraine. "We're taking sales from the end of the year and moving them up. Then you should see a market that is more in line with fundamentals."
In the meantime, the number of home sales continued on a tear in February with a 44 per cent year-over-year gain from recessionary lows a year ago, CREA figures showed. The average price of all homes sold on the Multiple Listings Service in February was $335,655, up 18.2 per cent from a year ago. The relentlessly strong price gains since last year's lows have fuelled worry about the formation of an asset bubble. Finance Minister Jim Flaherty is watching the country's mortgage market carefully but does not believe there is a housing bubble, he said in an interview with Bloomberg.
Anything that helps prices stabilize would be a welcome development for policy makers, who are taking steps to make it more difficult to qualify for a mortgage in a bid to cool off the market. While more listings are expected this year, buyers are expected to be out in full force for the foreseeable future. Buyers are expected to rush into the market in the coming months to avoid changes to mortgage application rules in April, anticipated higher interest rates by midsummer and the introduction of harmonized sales taxes in Ontario and British Columbia in July.
Subscribe to:
Posts (Atom)