May 2013 marks RateSupermarket.ca’s 5th anniversary! To celebrate this milestone, we’re offering fantastic special offers for our VIPs – customers who use RateSupermarket.ca to find their best rate, research their market options, and learn more about the best financial products.

Join the Party with Special Offers

Who says our birthday has to last a day? Until May 31, we’re featuring a number of exclusive offers for chequing accounts, credit cards, competitive mortgage rates, and more. Visit our 5 Year Deal page to learn more>

5 Years of Great Rates

To commemorate this special milestone, Money Wise editor Penelope Graham sat down with President Kelvin Mangaroo to chat about RateSupermarket.ca’s journey over the past 5 years. Check out the video!

RateSupermarket.ca’s 5-Year Anniversary from RateSupermarket.ca on Vimeo.

The post It’s RateSupermarket.ca’s 5th Year Anniversary! appeared first on RateSupermarket.ca Blog.

Can a price be placed on loyalty? Retailers certainly seem to think so – and many are happy to reward consumers for their repeat business with freebies, exclusive deals and prizes. For savvy customers who know to ask, there’s a gold mine of free stuff to be had, but one day in particular holds the potential for great savings – your birthday!

It’s Your Party And You’ll Save If You Want To

Many retailers have a special gift offer reserved for customer birthdays. These gifts can range from discounts and coupons, free items, event tickets, food and beverages, and more. If you play your cards right, it’s possible to dine free of charge on your birthday, and score oodles of free swag to boot – it just takes a little organization.

Steven Zussimo, blogger and co-founder of the popular coupon and savings resource Grocery Alerts has also penned the ultimate guide to birthday freebies. The Free Stuff in Canada e-book can be downloaded free of charge at Grocery Alerts, and organizes participating merchants by province. Check out his tips for getting the most from special birthday offers.

Know the Process

Some retailers require consumers to subscribe to an email newsletter or acquire a membership in order to be eligible for birthday freebies, while others simply reward those who show up in store with their i.d. Zussimo says, “I recommend subscribing in advance of your birthday (at least a few months) to make sure that the coupons arrive in your email.”

Make Your Wish List

Zussimo says over 180 freebie offers were located for the first edition of his e-book, and that has increased to 217 in the second edition. He adds the first step to planning your day is to do a little recon: “ I recommend doing a search at your favourite retailer’s website for the words, ‘birthday’ to see if they have a birthday program,” he says.

Make Your Birthday Last All Week

There’s no need to cram the collection of freebies into one day – many free offers are available in the weeks before and after your special day. Zussimo suggests compiling a list of the offers that you are interested in to determine what needs to be redeemed on the actual day, and those with more flexible expiry.

Read The Fine Print On Your Feeding Frenzy

Looking to kick off your day with Denny’s fabled free birthday Grand Slam breakfast and eat your way up from there? While many eateries offer free meals or treats, be sure you’re aware of any restrictions before the cheque arrives. Zussimo adds that some restaurants require a minimum number of diners to qualify for free food, and some deals may only apply to specific menu items.

It’s OUR Birthday – But You Get the Gifts

May 2013 marks RateSupermarket.ca’s fifth anniversary! To celebrate, we’ve got several exclusive offers and special rates up for grabs. So join the party – these great offers last until May 31!

The post 5 Tips: Score Free Stuff On Your Birthday appeared first on RateSupermarket.ca Blog.

The millennial generation, affectionately known as the ‘Net Generation’, has grown up in a world where information is practically ubiquitous. Not only has the Internet allowed the rapid spread of information, it has also made daily tasks like banking a lot easier. A recent BMO InvestorLine study reveals that the trend towards doing everything online looks to continue its rapid growth – 81 per cent of those ages 18 to 34 are likely to be investing online in the next five years. With only two in 10 (20 per cent) of Canadians invest online today, what’s driving this sudden change?

The Benefits of Online Investing

Let’s face it; the days of calling your stock broker to make trades on your behalf are long gone. Today, a lot of investors take the DIY approach and want more control over their portfolio. Our lives are hectic enough as it is – it’s tough to find time to set up an appointment with a financial advisor and review your investing strategy. If you feel confident managing your own investments, online brokerages offer a great way to purchase, sell, and keep a close eye on your investments on your own time.

“Canadians clearly are comfortable and have a passion for being online, and the Internet is a growing part of their daily lives,” said Viki Lazaris, President and CEO of BMO InvestorLine. “Online investing is a natural extension of that, offering investors more control over their portfolios, the ability to monitor their investments 24/7 and access to extensive research and tools.”

Tips for Investing Online

It’s important to learn the ropes of online investing – the last thing you want to do is lose your shirt over a few bad trades. Here are some tips:

Choose Wisely: Do you know which online brokerage you’re going to go with? There are many to choose from – BMO InvestorLine, RBC Direct Investing, Scotia iTrade, Questrade, and the list goes on. While it’s easiest to open an account with your local branch, convenience doesn’t always mean the best detail – some lenders charge sky high commissions and fees per trade.

It’s also a good idea to review the services offered to investors, including resources, tools, the user interface and stock screener. These can be crucial to help you make the right decisions.

Lending a Helping Hand: For new investors support can be crucial – even for those taking the DIY approach. If you’ve never managed your own portfolio there can be a steep learning curve. You’ll want to find an online brokerage that offers plenty of assistance. Demonstrations, seminars, webcasts, tutorials, analyst reports and newsletters are just some of the tools at the disposal of investors today. Although it’s great to be able to trade 24/7, sometimes it’s nice to be able to pick up the phone and get a human on the other line. Make sure to ask plenty of questions beforehand to make sure you’re not in over your head.

Investing Tools: You can’t possibly make the right financial decisions without the right tools. It’s wise to ask about the tools and resources offered by online brokerages to find out if they’ll meet your needs. While basic financial information will probably do for the average investor, if you’re a serious trader you’ll want access to latest up to the minute trading news and information. Access to information on highly respected websites like Morningstar can help turn your investing dream into a reality.

The post Millennials Prefer Investing Online appeared first on RateSupermarket.ca Blog.

May 17, 2013

Thinking of jumping into the fray of the Spring Canadian real estate season? Buying a home in today’s mega-competitive market always presents challenges – but a hot-and-cold housing market can make it tough for sellers as well.

Don’t get real estate rage – whether you’re searching for the perfect starter home (at a starter price), upping your asking or fighting other buyers for your dream abode, our guide can help.

 Bidding Wars: 4 Ways to Win That House

After months of searching, you’ve finally found your dream home, and at the right price – but unfortunately for you, so has someone else. Bidding wars emerge when there’s hot interest on a home among buyers, and can drive an asking price through the roof.

Read these tips for surviving a bidding war – and how to know when it’s time to walk away for the sake of your budget.

Read Allan’s Blog | 4 Ways To Win That House

9 Value-Adding Home Staging Tips

First impressions are everything – especially to home buyers! If you’re looking to sell your home, don’t let a shabby yard or inside clutter be a turnoff to buyers.

Staging your home can be an effective way to increase its value with little effort and investment. From repainting to renting furniture, here are a few easy how to’s.

Read Diane’s Blog | 9 Home Staging Tips

Set Smarter Starter Home Expectations

The search for the perfect first home can be an exciting experience – but can often end in heartbreak as would-be buyers realize their wants and budget don’t exactly meet in the middle.

For many first timers, the challenge is setting realistic expectations. Check out these ways to avoid starter home disappointment, and make the most of your down payment savings.

Read Melanie’s Blog | Set Smarter Starter Home Expectations

And in this week’s finance headlines…

What is a REIT – And Should You Invest?

There have been many headlines recently about REITs, and how many of Canada’s large retailers are starting their own. Read on to learn what REITs are, and whether they could be a good investment for you.

Read Rubina’s Post | What Is a REIT?

Helping Your Kids Buy a Home? Protect Your Own Finances

Many parents are happy to help their adult children with the purchase of their first home – but family and money matters don’t always mix. Here’s how to give your kids a hand with their down payment or mortgage, while still protecting your own finances.

Read Gordon’s Post | Helping Your Kids Buy a Home?

The Best Mother’s Day Is One Without The Kids

The results are in from RateSupermarket.ca’s ultimate Mothers Day giveaway! It’s time to unveil our winner!

Read Kelvin’s Post | The Best Mother’s Day Is One Without The Kids

Insurance Overlooked By Many First Time Buyers

A common mistake made by first time home buyers is overlooking some types of home insurance coverage.

Read Gordon’s Post | Insurance Overlooked By Many First Time Buyers

Is The Mortgage Market In For a Major Cooling Period?

New stats for starts suggest the Canadian mortgage market is in for a period of moderation, especially in once-hot urban condo markets. What does this mean for new home buyers?

Read Drew’s Post | Is The Mortgage Market In For A Major Cooling Period?

Finance Lessons I Learned From Mum

What finance lessons did you learn from your mother? Blogger Andrew Seale shares how he learned the basics of bank accounts and savings from his.

Read Drew’s Blog | Finance Lessons I Learned From Mum

Adult Boomerangs Cause Parents Big Bucks

Boomerangs, adult children who return to live at the family home for financial assistance, are putting a strain on their pre-retirement parents.

Read Drew’s Blog | Adult Boomerangs Cost Parents Big Bucks 

Canadian Young Adults Face Tough Hurdles

Meet Get Out Of My House guest judge Benjy Katchen. Read on for his commentary on the financial challenges facing today’s young adults.

Read Benjy’s Blog | Canadian Young Adults Face Tough Hurdles

You Answered!

WIN by answering our poll!

This week on Money Wise, we asked Canadians:

What is the biggest challenge facing home buyers?

77.5% say saving for a down payment is the toughest barrier to home ownership – coming up with a nest egg large enough to avoid taking out CMHC default insurance takes time and effort.

16.7% say that tricky closing costs pose the most difficulty to would-be buyers.

5.9% say surviving a bidding war is the biggest deterrent to owning a home.

Get in on this week’s action! Head over to our poll and answer:

What are the biggest financial challenges facing young families?

Have something to say? Shoot us a comment or visit us on Twitter and Facebook!

The post It’s Buying and Selling Season appeared first on RateSupermarket.ca Blog.

More Changes For The Mortgage Market?

Mortgage regulators may not be finished with their rollout of policy changes; it has been recently reported that OSFI, the national regulator for financial institutions in Canada, is considering further limitations on maximum mortgage amortizations. However, this time around the changes would target conventional mortgage buyers – those who pay more than 20 per cent of their home purchase down payments.

OSFI is contemplating cutting amortizations to a maximum of 25 years, down from the current 35. This would follow the same limitations placed on high ratio borrowers last summer – the results of which are still being felt throughout the Canadian housing market.

The Impact of Home Buyer Barriers

Last year’s restrictions, which also enforced new credit score requirements, debt-to-income ratio criteria, and limited HELOCs to 80 per cent of a home’s loan-to-value ratio, effectively cut some buyers out of the market. A Maritz survey conducted for the Canadian Association of Accredited Mortgage Professionals (CAAMP) found 16.9 per cent of the high ratio mortgages sold in 2010 would not have qualified under the new rules.

In fact, 62 per cent of of the $960-billion-worth of mortgages financed by Canada’s big banks are high ratio and require default insurance backing from the Canadian Mortgage and Housing Corporation.

Any new changes made by OSFI would be among efforts to minimize the threat posed by these buyers, who are more likely to default on their mortgages – a severe symptom experienced by the U.S. housing market that the Canadian government is looking to avoid.

Is Amortization the Answer?

While the fallout of last year’s changes was felt almost immediately – sales fell 7.8 per cent from August to October nationwide – this round would affect a much smaller buyer pool. Only six per cent of mortgages taken out last year have an amortization between 30 and 35 years – and 79 per cent of buyers – both low-and-high ratio – have amortizations up to 25 years, according to CAAMP’s findings.

The school of thought on longer amortizations is that they give borrowers the leeway to take on more debt than they can realistically afford. However, as reported by Canadian Mortgage Trends, a recent study shows long amortizations are not a prominent cause of mortgage default – lack of home buyer equity topped that list.

The idea is that by forcing buyers to save for longer, more home purchases will be made with savings, and not dependent on IOUs.

Debt Risk is the True Target

Debt carried by Canadian consumers is public enemy number one to the Department of Finance, as it puts Canada’s banks in a vulnerable position in the face of another economic downturn.

Canadian banks were recently deemed“too big to fail” by OSFI, meaning they’re vital to the overall survival of Canada’s entire economy. This has prompted measures to ensure more of their assets and capital are based on stable income such as consumer deposits, and not risk-based business.

The Bailout Burden

This aversion to debt also brings light to our banks’ symbiotic relationship with the CMHC, which currently insures $560 billion in mortgages for Canada’s lenders. As CMHC is a crown corporation, any losses from mortgage default are covered by Canadian taxpayers. But what should happen if a severe market downturn leads to defaults en masse? One BMO Capital Markets analyst indicates that our big banks would be on the hook to cover such losses.

While the event of the CMHC going belly up is highly unlikely, preemptive caution may be a contributing factor to the latest round of proposed changes. As for how they’ll further impact the mortgage market as a whole – only time – and buyer trends – can tell.

RateSupermarket.ca Week in Review

Looks like the downward pressure on five year fixed mortgage rates has eased off for now – the rate has held at 2.64 per cent over the last two weeks. The only movement seen on the Best Mortgages table this week is for 10-year fixed mortgage rates, which dropped to 3.54 per cent from the previous 3.57.

The post Spotlight On Mortgages: May 17, 2013 appeared first on RateSupermarket.ca Blog.

Real estate prices in Canada have been on a bull run for the last 20 years. Despite the economic troubles that have plagued the U.S. housing market, Canadian home prices are stable and continue to tick higher as demand increases and supply decreases. Over the last four years, Canadian home prices have risen 25 per cent, compared to the U.S. where home prices have declined by more than 27 per cent.

The boon in prices is also reflected in commercial properties. The value of buildings such as retail malls, grocery stores and big box store buildings has also been increasing on an annual basis. This is leading some of Canada’s largest retailers – such as Loblaw, and most recently Canadian Tire – to convert their many real estate holdings into real estate investment income trusts or REITS, in hopes of providing more option for investor and extra cash flow. REITS are attractive to both for a number of reasons.

What Is a REIT?

A REIT is a security that sells like a stock on the major exchanges and  primarily hold income producing real estate assets. When retailers turn their real estate into income trusts, they’re referred to as “equity REITs”,  as the companies invest in their own properties. The revenues from these properties comes principally from rents.

When they first launched in the U.S in the 1960s REITs were considered a complicated investment, but are now seen as easily accessible, tax efficient and a good addition to anyone wanting to buy and hold an investment.

Other REIT Benefits

REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. Following the economic meltdown of 2008, investors are looking for safe income generating investments. REITs can provide this income security through the rents collected and the increase in property value. Unlike a company stock, REITs are less vulnerable to losing a dramatic amount of money in a short amount of time over negative news.

How Tax Laws Differ For REITS

REITs enjoy favourable tax treatment, which became even more attractive in 2006, when the federal government sharpened their focus on tax income to ensure it wasn’t missing out on tax revenues. However, to continue to encourage real estate development and investment, the government excluded REITS from the new rules.The vast majority of income derived from a REIT must come from real estate itself to qualify for the tax-deferred status REITs enjoy. A REIT is not subject to Large Corporations Tax (LCT) and provincial capital taxes

Should You Invest In REITs?

This information only applies if you hold your REIT outside a registered account, such as a TFSA, RRSP or RESP. If you’re thinking of investing in REITS there are some individual tax benefits as well. Remember: never make an investment decision without consulting a professional and doing the research to make sure it works for you. REITS are seen as long-term investment.

There are already a number of existing REITs, such as the aforementioned Canadian Tire, Loblaw and Hudsons’s Bay Company. As long as real estate property values continue to rise the interest for retailers to turn their properties into real cash generators will exist creating some unique opportunities for Canadian investors.

The post What Is a REIT – And Should You Invest? appeared first on RateSupermarket.ca Blog.

Parents who want to help their children buy their first home should think twice about how they provide financial support.  

One of my daughter’s friends is in the market for his first home, but he doesn’t plan to get a mortgage from a bank. Instead, he hopes to have his recently retired parents lend him the money.

Here’s his thinking: Although he’s already been preapproved for a five-year fixed mortgage, he hopes to get a much better deal from his folks. In fact, he’s pretty much convinced them that they’ll actually see a better rate of return than they do now from the stack of shorter-term GICs they’re using to fund some of their retirement expenses.

Good deal? Well, for him, sure — and maybe for his parents as well, providing they don’t spread themselves too thin.

Family Loans Can Be Risky

An intra-family mortgage can certainly help first-time home buyers, particularly if they have other competing expenses such as car payments or student loans. But lending money to your adult kids can also be a risky proposition if you’re not careful. Even a small loan can disrupt or sometimes destroy family relationships.

Many advisors discourage intra-family lending, largely because of the emotional issues created when adult children don’t stick to the plan, are late with their payments, default altogether or simply sow discord among other family members who aren’t directly involved.

How do you avoid family problems when help is given to one child and not others? The first thing is to avoid surprises. Before making any final decisions, be upfront with your other kids so they don’t feel they’re somehow being slighted.

Where Things Can Go Wrong

Although your first inclination will likely be to help out, look at the downside as well. Is your son or daughter’s income secure? What happens if they can’t — or won’t — repay the loan? What if they split with their partner? What if you die?

While it may not have been any of your business until now, make sure you understand the underpinnings of your children’s living arrangements and the impact they might have on any help you’re offering.

If they’re part of a couple and the relationship ends, for instance, the two parties would split any equity in the home. Keep in mind, however, that common law partners don’t have the same financial rights as legally married spouses should they break up.

Draw Up A Promissory Note

The simplest family loans are really nothing more than IOUs and are usually unsecured without any collateral. For smaller amounts, you don’t necessarily need a lawyer, but when the amount borrowed is large enough — you’ll have to decide what that means in your family — you’d be wise to set up a structured loan arrangement.

The loan itself should be documented with a promissory note that spells out the amount borrowed, the interest rate being charged, the specific terms of repayment, including the timing and amount of each payment due, as well as the expected payoff date.

In this particular case, the proposal started out as a “could you help with my down payment?” deal, without any contingencies if their son was late with his payments, for instance, or split with his partner. But those particular issues were eventually sorted out.

The couple wasn’t, however, completely upfront with their other kids, one of whom now feels a bit confused and somewhat slighted. Nor, at the time, did they realize that their son’s soon-to-be in-laws had also agreed to a similar arrangement.

You can probably do better.

The post Helping Your Kids Buy a Home? Protect Your Own Finances appeared first on RateSupermarket.ca Blog.

It used to be that many first time buyers eased into the market with a starter home – a perhaps more modest than desired property that offers the chance to build equity and upgrade to better housing in the future. With housing prices at all time highs across Canada, and recent rules that limit affordability options for buyers, however, the concept of a “starter home” may be put on hold for many.

A Change of Expectations

Let’s take a look at a theoretical scenario facing many would-be home buyers: Kim and Kyle have been together for six years, plan to get married and wish to be home owners before they do so. They have saved a small nest egg and feel ready to begin the search for the perfect home.

Kyle wants lots of space, with a finished basement and a large backyard where he could host summer BBQs, and isn’t interested in renovating a fixer-upper. Kim wants a big kitchen and a modern, open-concept layout. She’d like to have granite countertops and hardwood floors, and hopes that their first home will be large enough for the children they plan on having. She thinks it would be nice if their house were located in a nice residential area, ideally somewhere close to a public school. With their list of needs and wants in place, Kim and Kyle begin the hunt.

Dreams Vs. Reality

Kim and Kyle’s enthusiasm for the search quickly fades as reality sets in. With a tight budget and only enough for a maximum down payment of five per cent (which caps the longest amortization for their mortgage at 25 years), things are looking a bit grim. Quickly they realize that they’re going to have to make sacrifices – and not just one or two, but many. As a result, they’re forced to re-evaluate their list, and realize they may be limited to home types they would never have before considered – the condo market.

Preparing For the Purchase of Your First Home

1. Know your credit rating. The first and most important step in preparing to buy your new home is getting your finances in order. This means paying down debt and evaluating your credit report to make sure it’s perfect. Without a mortgage loan you can’t buy a house, and you’ll only get that loan if your finances are in order.

2. Get pre-approved. Before you set out on the great hunt, it’s important to know just how much you can afford. The amount your lender will give you can make the difference between a single family started home and a small condo. Visit your bank or choose a mortgage broker and be sure to get preapproved before you hit the streets.

3. Make a list of your needs and wants. 
Kyle and Kim made a list of needs and wants, which is a great idea so that you’re on the same page. The problem for the couple was that their list wasn’t realistic, given current market conditions. Make your list, but prioritize what’s most important, and be honest on whether it’s possible with your budget. You may need to re-evaluate after you view a few homes, but that’s ok. It’s a learning experience.

4. Choose a real estate professional.
 Not sure who to work with? Ask family and friends to share their experiences with an agent. Be sure to conduct interviews to make sure that the potential real estate agent fits your needs – and matches your personality.

Let the Search Begin!

Remember, your idea of the perfect first-time home and what your money can truly buy might not actually jive. Be prepared to amend that list as you go. It’ll make the search that much more rewarding. And good luck!

The post Set Smarter Starter Home Expectations appeared first on RateSupermarket.ca Blog.

Introducing… the winner of RateSupermarket.ca’s Get Out Of My House winner!

Congratulations Ando on winning the grand prize – over $5000 in funds to move out of his parents’ home and into his own place. Time to start apartment hunting!

Check out the grand reveal!

Meet Ando – RateSupermarket.ca’s Get Out Of My House Winner! from RateSupermarket.ca on Vimeo.

The post Congratulations Ando! RateSupermarket.ca’s Get Out Of My House Winner! appeared first on RateSupermarket.ca Blog.

Prodigal Progeny Wins Over $5,000 to Launch Life

Toronto, ON – May 14, 2013 – Halifax resident Ando Hirschbach is giving his mom the best belated Mother’s Day gift ever – the house to herself! Ando is the winner of over $4,000 cash and a $1,000 GIC to help him move out on his own. The giveaway from RateSupermarket.ca asked frustrated moms and their adult children the following: Why do you or your child deserve to cut the apron strings? Six finalists were chosen from over 100 initial entries, and battled online for votes. One has emerged victorious.

Ando’s story resonated with other young Canadians. He took a ‘gap year’ during university to travel, intending to return and complete his degree, but rising tuition costs compelled him to cohabitate with his mom, Kate. As a result of the RateSupermarket.ca prize, Ando will no longer be among the 42% of Canadians in their twenties who still live in the home of one or both parents*.

With increasing student debt, high rent, and a sluggish economy hanging over their heads, many recent graduates find it difficult to leave the nest.  RateSupermarket.ca, Canada’s independent rate comparison site, chose the month of May to bring attention to young Canadians’ ‘failure to launch.’ The company determined the ‘Real Cost of Moving Out’ – $5,397.50 – by averaging the price of accommodations, cleaning supplies, futons, and other miscellaneous items to determine the price to move out of mom and dad’s place; a full breakdown can be found in their infographic, featured at getoutofmyhouse.ca.

“It’s tough out there for young adults trying to get their start, so we’re happy that we were able to help one of them get a leg up,” says Kelvin Mangaroo, President of RateSupermarket.ca. “While we had a little fun with this issue, we emphasized the importance of financial literacy for young people and how they can better prepare for the financial responsibilities of adulthood.”

To help share this message, RateSupermarket.ca launched the “I Love You, Now Get out of My House!” giveaway (getoutofmyhouse.ca) in April. The competition received over 150 entries from parents and grown children alike. The six finalists’ submissions can be viewed at www.getoutofmyhouse.ca.

*Human Resources and Skills Development Canada: “Family Life – Young Adults Living with their Parent(s).”

About RateSupermarket.ca (www.RateSupermarket.ca)

Over 3 Million Canadians have found their best rate for personal finance products on RateSupermarket.ca. Launched in 2008, RateSupermarket.ca is Canada’s largest and most comprehensive rate comparison site, offering visitors transparent access to the best mortgage rates as well as credit cards, bank accounts, insurance quotes and GIC rates.

The post The “Best Mother’s Day” Is One Without The Kids appeared first on RateSupermarket.ca Blog.