Mortgage Market Madness? + MORE Feb 10th

Guaranteed investments pay under three per cent a year, but keep your capital safe from harm. Here’s a guide to tweaking the rates.

Are we in for a second round of the Great Canadian Mortgage wars? The 5-year fixed cost of borrowing plunged this week to 2.99%, sparking a flurry of headlines and speculation. Will this cause the housing market to reheat to dangerous levels? Should buyers rush into the market? Will Jim Flaherty have to make a call? Read our special coverage to find out!
We’re also in the midst of RRSP season – are you caught up on this year’s contributions? A new study finds Canadians are turning away from RRSPs as a savings method – but are they risking their retirement funds in the process?
2.99% Mortgage Rates Are Back!
This Monday, the lowest five-year fixed mortgage rates dropped as low as 2.99% – a new record not seen since last August. Such discounted rates mean big savings for home buyers – read on to see what your monthly payments would be, compared to rates from the big banks.
Read Penelope’s Blog | 2.99% Mortgage Rates Are Back!
What Canadian Investors Should Know About The Fragile 5
Concern about growth in China and other emerging markets triggered a wave of selling in less developed economies last week…

Guaranteed investments pay under three per cent a year, but keep your capital safe from harm. Here’s a guide to tweaking the rates.

TORONTO – The love affair Canadians have with debt is still going strong, according to a new report by credit monitoring agency Equifax Canada.
Equifax said Monday that its figures show that consumer debt, excluding mortgages, rose to $518.3 billion through the end of November 2013. That was up 4.2 per cent from $497.4 billion a year earlier.
Despite the increase in debt, however, the overall delinquency rate — bills due past 90 days — declined to a record low of 1.12 per cent from 1.19 per cent in the same period of 2012.
“The real pattern that we’ve been observing is that Canadians are taking on more debt, but they can handle it well and are making those monthly payments,” said Regina Malina, director of analytics for Equifax.
Meanwhile, overall consumer debt, including mortgages, also continues to rise — up 9.1 per cent to $1.422 trillion from $1.303 trillion a year earlier.
Malina says the data shows that Canadians are willing to take on more debt — from car loans to credit card purchases — but are more aware of how important it is to keep their debt levels under control…

(Image courtesy of adamr / FreeDigitalPhotos.net)
Two-thirds of Canadians belonging to Generation X and Y are confident in their ability to purchase a home, send their kids to university and live a comfortable retirement, a new BMO study has found. Is their optimism misguided? The bank’s sobering report suggests it might be given today’s challenging landscape wrought with “spiralling real estate markets, delaying parenthood and a lack of retirement savings.”  All this may be true, but this Millennial isn’t utterly despondent for her tribe. I’ll explain why later, but first let’s hear from the survey respondents and BMO.
Home ownership
Overall, 68% of Gen X (born between 1965 and 1979) and Gen Y (born between 1980 and 2000) respondents said they feel confident they will be able to purchase a home at some point in their lives. This despite the fact the average home in Canada now costs roughly $400,000 or nearly eight times the average pre-tax annual income of a salaried worker in this country (compared to five times in 1997), as BMO’s 12-page Wealth Generation: The Financial Challenges for Generations X & Y report points out…