Tag Archives: governement policy

BMO Pulls 2.99% Mortgage Rate

Bank of Montreal (BMO) will raise the rate on its widely publicized 2.99% 5 year fixed mortgage rate in a couple of days.  The “No Frills” mortgage has always carried restrictions including a “no-pay-out” clause, limited pre-payment options and a set expiry date.  The current expiry date is set for tomorrow March 28th, and the bank has made it clear that it will not extend the date. Although the mortgage … Read More

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Flaherty Doesn’t Make Cents

Jim Flaherty is defending his decision to interfere in the mortgage market on the basis that he is preventing Canadians from borrowing more than they can afford.  This is nonsense.  After tightening mortgage rules 4 times in the past 4 years and enhancing the powers of the Office of the Superintendent of Financial Institutions (OSFI) to oversee prudent lending practices, we now have extremely conservative lending practices.  Anybody that still … Read More

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Flaherty Tells Bank to Raise Mortgage Rate

Jim Flaherty had one of his officials call Manulife Bank to voice his displeasure over their latest mortgage rate drop.  As a result, Manulife reversed a published rate drop to 2.89% for their 5 year fixed rate mortgage.  This unprecedented government intervention into the free market is a scary turn of events that threatens the principals on which our Country was built. Anti trust laws prohibit collusion among businesses including … Read More

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Let the Mortgage Rate Wars Begin

The clear sign of a mortgage rate war is when Bank of Montreal (BMO) starts advertising a 2.99% 5 year fixed mortgage rate.  Although current bond yields don’t support such a low mortgage rate we are entering the critical spring season that can make or break a bank’s annual lending target. The tightened mortgage rules have done their job and pushed many potential buyers out of the market and scared … Read More

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Bank of Canada Finally Admits Rates to Remain Low

In a speech at the Richard Ivey School of Business, Mark Carney admitted that the benchmark interest rate would remain at its current low of 1% into 2014.  While it’s been painfully obvious to industry players that the Bank of Canada (BOC) could not raise interest rates due to the serious negative consequences, Mr. Carney and the BOC had been threatening rate hikes for most of 2012.  This empty threat … Read More

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S&P Ratings Questionable

S&P has made questionable ratings over the past few years, putting into doubt their value and purpose.  A recent downgrade of Canada’s big banks is the most recent example of how out of touch they can be with their ratings system.  It’s 2011 downgrade of the US government was farcical at best and interpreted by many as more of a political statement than a risk rating. It seems that the … Read More

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Pennies Stop Shipping Today

As of today the Royal Canadian Mint stopped shipping pennies to retail stores and banks.  The death of the penny was announced nearly a year ago in the federal budget.  The Mint actually stopped producing the penny last May, but it wasn’t until today that the supply actually stopped. The federal government has given retailers flexibility in their rounding calculations, but has provided guidelines that the majority of retailers will … Read More

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Few Sacrificed For the Good of the Many

It seems that all housing market industry participants are finally in agreement.  Mortgage rules don’t need to be any tougher.  After the most recent mortgage rule changes, Jim Flaherty admitted that he couldn’t see making them any tighter.  Adrienne Warren, Scotiabank’s senior economist, recently pronounced “Canada’s national housing market is shifting towards a more sustainable path”, and earlier this week, Standard and Poor’s reaffirmed Canada’s triple A rating. Sales activity … Read More

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Bank of Canada Maintains Mortgage Rates

The Bank of Canada announced today that it’s leaving interest rates unchanged.  The target for the overnight rate will remain at 1% which will in turn leave the prime lending rate at 3.0%.  This decision was largely expected by industry participants who believe that the prime lending rate will maintain it’s current level well into 2013. What wasn’t clear was the message the Bank was going to relay in it’s … Read More

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Mortgage Refinances Plummet while Credit Card Debt Soars

According to a report issued by CMHC, overall mortgage activity declined by 37% in the third quarter of this year.    The biggest chunk of that decrease is from mortgage refinances which decreased by 22% from the same period last year. Mortgage refinancing rules were hit the hardest with the barrage of mortgage rule changes over the past 4 years.  Four years ago you could access as much as 95% of … Read More

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