Economic News
Failure to Launch-Facebook IPO
The much hyped launch of Facebook's IPO left investors disappointed. This was the final piece of bad news to a horrible week in the global markets. How about some good news for mortgage holders? Global markets performing poorly will continue to put downward pressure on rates and could again force the hand of the Bank of Canada to keep the overnight rate untouched.
For a US perspective on the week and the markets click here:
Canada not Interested in a European Vacation
Canada is not interested in a Europe debt bailout. Insisting taking care of business at home is the first priority.
Read more here (Financial Post)
Rate Hike? Not This Year.
The weak global economy will keep the Bank of Canada from raising rates until 2013. This is not suprising, but normally such statements are not made for a 12 month window. For Alberta the continuation of job creation coupled with historical low rates may be the perfect storm for housing demand and growth.
Read More financialpost.com
Job Loss
Some alarming numbers on the unemployment front as Canada loses over 18,000.00 jobs. A lot of this is part time work and in Alberta, especially in oil and gas, a lot of workers have moved into contract style positions, so it may not be as doom and gloom as it seems. This said, as it has been for 3 years now, the need to tread cautiously is still very much here!
The Mortgage Wire
Renewal Time
Many mortgage holders that bought during the real estate peak of 2007 and 2008, have mortgages that are coming up for renewal in the next 12 months. Borrowers that opted for 4 or 5 year fixed rates, are seeing a spread between their current mortgage and today's rates of 2% or more. The savings are large and can been used in many ways. One option is accelerated mortgage reduction (keep your payments at the same amount and apply the savings to principal).
Read more on this type of plan here (Globe and Mail)
Of course, this is not the best plan for everyone. If you have other higher interest debt, an investment opportunity to build wealth, or needs for greater cashflow-then a reduced mortgage payment might be the better move than accelerating the pay off.
BMO a No Go
BMO has lowered their 5 year fixed rate to a historical low of 2.99%. Most news outlets are mentioning that the only restriction is that the amortization cannot be greater than 25 years, and prepayment options are capped at 10%. However, the most important term in the mortgage is being left out new reports. The BMO Low-Rate Mortgage has a sales clause. In simple terms, the mortgage cannot be paid out without selling your home. Although BMO claims to be "Making Money Make Sense" , with many other lenders offering a 4 year fixed rate at 2.99% without restrictive terms-taking a product that traps you in your mortgage doesn't make a lot of sense.
See the BMO product by clicking here:
2012 Property Tax Assessment
The city of Calgary has released the new Property Tax Assessments. This will give you an idea on the value of your home and how it will be taxed. However, they are often not necessarily accurate on current market value. For a better idea contact your Realtor to provide you with a current analysis.
To pull up your assessment online click here
RRSP Plan
The holiday season is more about spending than saving, but it is also a good time to take a look at your RRSP room. Although investing may seem scary in the currnet market, there are some smart opportunities and by putting monies into an RRSP you should recieve a tax refund that you can either apply against your mortgage, re-invest or pay off debts due to holiday over-spending. Want to tap into your home equity to boost your savings? We have a plan for you!