Tighter mortgage rules were intended to cool the Canadian housing market, but according to National Bank economist Marc Pinsonneault they are having the opposite effect in the short term.
The new rules require insured mortgage holders to put down a minimum of 10 per cent for any portion of a house’s price above $500,000. The 5-per-cent minimum down payment still applies for the portion of a house price below that.
Economists predicted last year the rules would temporarily drive the market up, as homebuyers raced to land a mortgage before the deadline.
But Pinsonneault says the effect will continue this year, because the new rules don’t apply to anyone who locked in a mortgage before Feb. 15 of this year, and those people have until July 1 to buy a home.
It seems like everything done in the name of ‘cooling’ the housing market has the opposite effect. Read the full article here.
It’s that time of the week again…
Friday Free-for-all time!
This is our regular end of the week news round up and open topic discussion thread for the weekend – here are a few recent links to kick off the chat:
–The bank will pay your mortgage
–The illusion of equity
–More cutting by Poloz?
–Bubbles and crying wolf
–The kids are all right
–HSBC stops some china US mortgages
–Prices up beyond wages
So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments section below and have an excellent weekend!
As the economy deteriorates further Canadians are sitting on a pile of cash. Stock portfolios are holding a record $75 billion in cash.
How do you get people spending and investing again?
Well, you could try negative interest rates.
That kinda worked in the EU. Denmark has driven down their currency which has helped exports. Of course the flip side of negative rates is the risk of housing and stock bubbles.
But how would negative rates most likely affect Canadian consumers? Higher fees.
“What you might see happening is a negative interest rate masquerading as higher fees,” Milevsky said. “No bank in their right mind would tell a consumer, give us your hundred dollars and we’ll give you 95. That will never happen.”
Read the full article here.
This is a weird story.
Guy buys a house in Toronto and pays off the mortgage in 3 years by working all of the time, living in his basement and spending little to no money.
And people are angry?
But after CBC News reported Cooper’s story late last year, reader comments flooded the internet, either praising or reviling the 30-year-old’s financial achievement.
“What is he going to do next, buy a car and sell one of his kidneys to pay for it?” snarled one reader.
An era of cheap interest rates has helped ignite an escalating and troubling household debt binge. The topic has become such a touchy one it can spark polarized opinions, finger pointing and even contempt.
Read the full article here.
Hey, it’s the end of another work week!
You made it to the weekend and that means it’s time for another Friday Free-for-all!
This is our regular end of the week news roundup and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–A petition for change
–No more goofy superstitions
–Reverse mortgages popular
–Royal Bank scraps limit
–Uncle and Aunt-ecdote
–Times they are a changin’
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!