The Federal Reserve made an unscheduled rate announcement yesterday and cut their overnight rate by 50 basis points. The Bank of Canada wasn’t largely expected to cut its rate today at its scheduled announcement, but it followed suit and also cut its overnight rate by 50 basis points. This is the first rate cut we’ve seen since 2015.
The Bank of Canada cut its overnight rate for the first time in four years. This follows the US Central Bank doing the same thing just yesterday. In the BoC announcement it seems that the overall Canadian economy has been doing sufficiently well that under normal circumstances they would not have dropped the rate.
More good news for people who have been struggling with the mortgage stress test!
It was recommended by FINA (House of Commons Standing Committee of Finance) to the federal government that they “exempt mortgages from the stress-test where the mortgagor has already met the obligations of their original mortgage.” This is great news for existing borrowers who have already proven they can handle the rigors of mortgage repayment.
The Department of Finance announced Tuesday changes to the mortgage stress test. “The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.” This change is specific to insured mortgages (i.e. mortgages with a down payment of less than 20%) and takes affect on April 6.
If you’ve been having a hard time getting approved for a mortgage since the stress test was introduced in 2018, you aren’t alone. In fact, about 10% of buyers who would have been approved for a mortgage before the stress test find that they can no longer get into the home they were hoping for.
If you’re a first-time home buyer, you might have it in mind to pay off your mortgage as quickly as possible. The prospect of making extra payments from time to time probably seems great! But the reality is: there are penalties for paying off your mortgage sooner than agreed. And big banks dish out the biggest penalties of all.
The Bank of Canada announced this morning that the overnight rate has remained unchanged. The rate has been sitting at 1.75% for the last 12 consecutive months.
When the Bank released it’s monetary report in July the financial outlook for the country was weak. In this month’s monetary report the outlook is even weaker.
If you’re like most Albertans you’ve probably been feeling pretty pessimistic about our economy for the last few years. Thousands of people in the oil field have lost their jobs, the cost of gas has been attached to a yo-yo, and small business owners have struggled.
But at last week’s annual economic outlook meeting of Calgary Economic Development (CED), the reality of our many recent successes was made evident.
When many new homeowners think about their mortgage payment they often cringe to think they’ll be making them for the next 25 years. Most of us like to get out of debt sooner rather than later and save on as much interest as possible. So knowing a few tricks to get your mortgage paid off faster always comes as welcome advice!