Posts Tagged ‘interest rates’

Market Commentary

November 4th, 2015 No comments

Hand writing Trends for 2015 with red marker conceptThe latest quarterly report from Canada Mortgage and Housing Corporation has some market watchers seeing red. But the agency points out its market assessment is an early warning signal and not a sign of a housing bubble that is about to burst.

The report indicates there are signs of over-valuation in 11 of Canada’s 15 major markets. Toronto, Winnipeg, Saskatoon and Regina all come in as “code red” for strong indications of problematic conditions.

Among the factors CMHC monitors are price acceleration, job and income growth, and overbuilding. The agency says it wants to promote stability by advising buyers, lenders and builders when a market is out of sync with economic fundamentals.

Montreal showed a moderate risk of over-valuation due low growth in first time buyers, weak income growth and a glut of unsold condos.
Vancouver – by far Canada’s priciest market – along with Calgary and Edmonton came in with low risk factors. Changes in those markets are in line with the local economies.

From: First National Financial LP

Residential Market Update

October 27th, 2015 No comments

Market Commentary

CMBondThe household debt to income ratio has hit an all time high – 165%. Yet the Bank of Canada seems to have gone strangely quiet on the subject.

Former bank governor Mark Carey routinely warned of the potential dangers brought by the lure of low interest rates, especially in the housing market.

Recently, though, new governor Stephen Poloz told a banking audience in Washington that it is not the Bank of Canada’s job to fix bad debt decisions made by consumers.

It is useful to note how the central bank views its own job. Poloz says lenders, and borrowers themselves, are the first line of defence against bad debt decisions. He says bank’s job is to manage inflation and the main tool for doing that is interest rates.

The Bank of Canada cannot separate the low interest rates meant to inspire business borrowing from the low rates that are fuelling the real estate boom.

Poloz does say, though, that the Bank of Canada is keeping a very close watch on those household debt levels.

From First National Financial LP

Liberal Government – How will their policies affect interest rates?

October 21st, 2015 No comments

LiberalGood evening,

Charmaine’s comment:   The prediction is that if there is going to be growth in the economy due to the Liberal Infrastructure program, this could lead to an increase in mortgage interest rates sooner than previously expected.



  • The federal Liberal Party, led by Justin Trudeau, appears likely to have taken 184 seats (54% of the newly expanded house) in last night’s election, a strong gain from the 36 seats (12%) held pre-election; handily passing the 170 seat threshold required for a majority government.
  • In their election platform, the Liberal party promised a revamping of the tax system and increased infrastructure spending, supported by deficits. Highlights include a new Canada Child Benefit, tax reductions targeted at middle income earners, and the creation of a new tax bracket for those earning more than $200K per year.
  • While it is difficult to assess potential impacts with any certainty at this early stage, the Liberal infrastructure program could boost annual growth in 2016 and 2017 by up to 0.1 and 0.3 percentage points, respectively.
  • Markets were noisy overnight, but the Canadian dollar has since recovered relative to yesterday’s close. Over the longer term, there is the potential for upward pressure on longer term yields resulting from increased deficit borrowing, but any impact is likely to be quite small given Canada’s favourable debt position relative to other countries, and the relatively small size of the additional borrowing.

From: Observation – TD Economics Oct 20th, 2015


January 14th, 2015 Comments off

Oil price vs interest rateShort answer is Yes. Since oil is a major part of the Canadian economy, lower oil prices means less royalty money for the government.   Due to the lower oil price, the Alberta oil patch is likely to cut production which would mean job losses. When determining interest rates, unemployment is one of the key indicators the government watches.   Bad news in the economy tends to mean good news for interest rates, meaning it exerts pressure on the Bank of Canada to reduce the prime lending rate (which affects the variable rate) additionally. The impact on the GDP will hold down the government bond yields which affects the fixed mortgage costs.

For now it does not look like we will be facing rate increases for variable or fixed rate mortgages!

January 8th, 2015 – Designer Mortgages Inc. copyright.

10 ways to reduce your tax bill

January 31st, 2013 Comments off

10 ways to reduce your tax bill


The days are starting to get longer, and you can feel that spring is right around the corner. With spring, of course, comes tax-filing season, so as “filing taxes” joins “spring cleaning” on your to-do list, here are 10 ways to save you money—and even land you that refund you’ve been hoping for.

• Tax-free savings account: Using a TFSA is a smart way to save on tax. Generally, the interest, dividends, and capital gains earned on investments in a TFSA are not taxed—not when they are held in the account or when they are withdrawn.

• Registered retirement savings plan:
Pay less tax and save for your retirement at the same time. Any income that you earn in your RRSP is usually free from tax as long as the funds stay in the plan.

• Charitable donations:
Donations of cash, goods, land, or listed securities made to a registered charity or other qualified donee may be eligible for a tax credit.

• Parents:
All those mornings spent at the hockey rink and afternoons spent at the ballet studio can mean savings—with the children’s fitness and arts tax credits. Child care is also deductible, so gather up your receipts.

• Family caregivers
: If you have a dependant with a physical or mental impairment, you could be eligible for an additional $2,000 this year with the new family caregiver amount.

• Student:
Were you a student in 2012? You may be able to claim tuition, textbook, and education amounts, as well as moving expenses if applicable. And if you’ve recently graduated, you can claim the interest you paid on your student loan.

• Public transit amount:
If you are a public transit rider, you may be able to save by claiming the cost of your transit passes. You can get up to 15% of the amount claimed.

• Seniors:
If you receive income from a pension, you can split up to 50% of eligible pension income with your spouse or common-law partner to reduce the taxes that you pay. You may also be eligible to claim the age amount, medical expenses, and the disability amount.

• Home buyers:
You may be able to claim up to $5,000 if you bought your first home in 2012.

• Hiring an apprentice:
Did your business employ an apprentice? An employer who paid a salary to an employee registered in a prescribed trade in the first two years of his or her apprenticeship contract qualifies for a non-refundable tax credit.

Make filing your taxes this spring even easier by doing it online. It’s fast, secure and you may be able to use cost-free filing software. The Canada Revenue Agency offers step-by-step instructions at

Source: News Canada