More Canadians Are Turning To Alternative Online Lenders + MORE Mar 5th

It is somewhat of an anti-climatic end to what has been the most closely-watched Bank of Canada announcement since the Great Recession. The central bank stated this morning that it will not cut its trend-setting Overnight Lending Rate further, maintaining it at 0.75 per cent. The Bank Rate will also remain at 1 per cent, and the Deposit Rate at 0.5 per cent, respectively.
What Does This Say About the Economy?
By leaving the rate untouched, the Bank of Canada is expressing confidence in the monetary measures they took on January 21: a surprise quarter of a percentage rate cut that blindsided economists and the big banks alike.
January’s rate cut was in response to the sharp decline in oil prices, which have slid by 50 per cent due to oversupply. Fearing the worst for jobs, spending power and inflation, BoC Governor Stephen Poloz stated the cut was a measure of “insurance” against oil’s fallout. Making the cost of borrowing more affordable in turn encourages Canadians to borrow and spend, supporting the economy and protecting core inflation…

Who do you turn to if the banks – and your parents – won’t offer you a loan? Increasingly, people are turning to online alternative lenders.
Loans on a leash
Over the past few years the federal government has introduced a number of measures to tighten the Canadian mortgage lending market in an effort to preempt any U.S.-style real estate collapse. These changes have included capping the amortization period on CMHC-insured mortgages at 25 years and requiring the self-employed to provide third-party income verification with their application.
The result has been to force some people to seek out alternative lenders. These options have always existed – ranging from family and friends offering short-term loans, often with little or no interest, to private mortgage arrangements – but the internet (literally) opens up a whole new world of potential connections. The market share of such lenders has increased to 2.2 per cent of all mortgage loans, according to a recent study by CIBC…

Who do you turn to if the banks – and your parents – won’t offer you a loan? Increasingly, people are turning to online alternative lenders.
Loans on a leash
Over the past few years the federal government has introduced a number of measures to tighten the Canadian mortgage lending market in an effort to preempt any U.S.-style real estate collapse. These changes have included capping the amortization period on CMHC-insured mortgages at 25 years and requiring the self-employed to provide third-party income verification with their application.
The result has been to force some people to seek out alternative lenders. These options have always existed – ranging from family and friends offering short-term loans, often with little or no interest, to private mortgage arrangements – but the internet (literally) opens up a whole new world of potential connections. The market share of such lenders has increased to 2.2 per cent of all mortgage loans, according to a recent study by CIBC…

It is somewhat of an anti-climatic end to what has been the most closely-watched Bank of Canada announcement since the Great Recession. The central bank stated this morning that it will not cut its trend-setting Overnight Lending Rate further, maintaining it at 0.75 per cent. The Bank Rate will also remain at 1 per cent, and the Deposit Rate at 0.5 per cent, respectively.
What Does This Say About the Economy?
By leaving the rate untouched, the Bank of Canada is expressing confidence in the monetary measures they took on January 21: a surprise quarter of a percentage rate cut that blindsided economists and the big banks alike.
January’s rate cut was in response to the sharp decline in oil prices, which have slid by 50 per cent due to oversupply. Fearing the worst for jobs, spending power and inflation, BoC Governor Stephen Poloz stated the cut was a measure of “insurance” against oil’s fallout. Making the cost of borrowing more affordable in turn encourages Canadians to borrow and spend, supporting the economy and protecting core inflation…