Today the Bank of Canada announced that once again (for the 13th consecutive time over the past 19 months) that there will be no change to the overnight lending rate. This pleases variable rate mortgage holders since there are no alterations to the bank’s Prime lending rate and therefore no increase to their own mortgage rate and monthly mortgage payments.
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The Bank of Canada (BOC) announced today (March 8th, 2012) that the overnight lending rate will remain unchanged for the 12th consecutive time over the last 18 months. The last time the BOC made a change to the overnight lending rate was back in September of 2010 with an increase of 25 basis points. The overnight rate currently lingers at 1 per cent. The bank rate is at 1.25 per cent and the prime lending rate also remains at 3 per cent.
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At first glance, getting a second mortgage may seem like adding insult to injury. If you already find it hard enough to meet your monthly (or bi-weekly) payments on your first mortgage, why would you want a second one?!? The fact is that a second mortgage is really a secured line of credit (secured against the value of your house), so financial institutions will offer you a much lower interest rate than, say, credit card companies. As a result, a second mortgage can save you money in the long run (if you’re looking to consolidate various high-interest debts).
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There are a handful of clever financial moves out there that you can pull to work existing banking and tax rules. Using your RRSPs to pay down your mortgage is one of them. It’s known as a self-directed mortgage. It’s not a commonly used trick, but one that might suit you if you’ve got more socked away in retirement savings than you have left on your mortgage.
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Despite what all the real estate market pessimists might say in my opinion there is no condominium bubble in Canada. All signs point to Canada’s real estate market remaining strong for this year and well into the rest of the decade. In most major urban centers the average resale price is at historic highs. This indicates an even greater need for condominiums, which are often seen as a more cost effective alternative to single family homes. Here are the major reasons that debunk any theory that Canadian condominium prices are bubbling.
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