Mortgages in Canada can be a murky subject – one that we hope to shed some light on with a series of highly informational articles.
Latest News
The State of Mortgage Consumers + MORE Apr 27th
Mortgage consumer debt reached a record level in the second quarter of 2017, yet mortgage holders have proven capable of managing their increasing monthly obligations. That’s according to CMHC’s recently released Mortgage and Consumer Credit Trends report, which said Canadian households&.... More »
My advice is simple: Over 50? Get a secured line of credit while you can qualify. + MORE Nov 15th
Contrary to media reports about our ‘record personal debt levels’, it’s extremely prudent to ensure you have access to emergency money.
The line of credit popularity that took place in the ’90s wasn’t a bad thing. It allowed us to borrow at low rates to invest or spend.... More »
Scotiabank not worried about its floating-rate portfolio Jun 28th
With variable rates rising by the month—and more hikes anticipated—observers are keeping a careful watch on adjustable-rate mortgages..... More »
Tapping into Lower Interest Rates: Does Renewing Your Mortgage Early Save You Money? Jul 22nd
Late last year, many had forecasted that the Bank of Canada might cut interest rates in 2020. However, no one could have foreseen just how low-interest rates were about to plummet in the coming months.
Canada’s COVID-19 lockdown led to a sharp rise in unemployment, causing the Bank of Canada to s.... More »
Borrowers to “feel the strain” of high interest rates for several quarters to come, says BoC Apr 13th
High mortgage rates are taking a bite out of borrower's budgets, and the Bank of Canada says they will continue to "feel the strain" for several more quarters to come..... More »
Using pension money to pay down debt
– moneysense.ca
Q: My husband is 65 and will soon be “paid off” to retire. The reason he’s still working is because we still have a sizable credit line debt of $50,000. (no mortgage or credit card debt). My husband will have a healthy DC pension that could pay us about $25,000 a year if we buy an annuity. As all the experts say you shouldn’t retire with debt, I was thinking of taking out the amount we owe from my small private pension and paying off the debt. I know that I will be hit with taxes but at least we will be debt-free. What is your opinion on this?
— Judy M.
A: Paying off debt is an effective part of your overall retirement readiness although it doesn’t have to be absolute. In today’s low-interest environment, servicing debt is quite cheap so paying extra tax unnecessarily may be more expensive than the debt interest payments.
Start by ensuring you are paying the lowest interest rate available. Taking out a Home Equity Line of Credit (HELOC) will reduce your interest rate to 3…
— Judy M.
A: Paying off debt is an effective part of your overall retirement readiness although it doesn’t have to be absolute. In today’s low-interest environment, servicing debt is quite cheap so paying extra tax unnecessarily may be more expensive than the debt interest payments.
Start by ensuring you are paying the lowest interest rate available. Taking out a Home Equity Line of Credit (HELOC) will reduce your interest rate to 3…
Turning investment income into mortgage payments
– moneysense.ca
Q: I have a mortgage of $120,000 with an interest rate of 2.25% variable.
I have some monies which I move around depending on the interest I get with the bank.
My income is $48,000.
I have some monies in TFSA. With these monies, I could pay off half my mortgage.
Should I pay off my mortgage partly or continue as is?
—Jane
A: The question of whether to pay down your mortgage or invest is an age old one in Canadian personal finance lore, Jane. There are varying opinions. Some people even suggest borrowing to invest à la “Smith Manoeuvre.”
I’m generally not a big fan of borrowing to invest, as I feel most investors don’t have the temperament, patience or risk tolerance to ensure it is worthwhile. Often those who borrow to invest are convinced to do so by mutual fund salespeople and the high fees on their investments negate much or all of the potential benefit anyway.
Ask a Planner: Leave your question for Jason Heath »
The thing is, Jane, you are indirectly borrowing to invest right now…
Efforts to cool housing market sparked drop in CMHC insurance
– theglobeandmail.com
Canada Mortgage and Housing Corp. says total insured volumes fell 41 per cent in the first quarter
