Why mortgage penalties are so hard to understand

By Peggy Mackenzie If you want to break your mortgage, there are two ways to calculate the penalty. One uses three months’ interest and the other uses the Interest Rate Differential (IRD).  The bottom line is that with either method, if you want to take advantage of lower interest rates, it’s going to cost you. […]

CHILTON TAKES A SWIPE AT REVERSE MORTGAGES

The list of detractors of reverse mortgage has another name added to it: David Chilton, otherwise known as ‘the wealthy barber’, after the title of this famous book on personal finance. At a speaking engagement Thursday night in Scarborough, Ont., Chilton discussed various mistakes people make while managing their financial affairs. Taking out reverse mortgage, […]

Beware the debt-reduction pitch

With Canadian household debt levels at historic highs, some consumers might be looking for ways to reduce what they owe – or at least make repayment a little less painful. A number of companies offer debt reduction deals to help provide relief from creditors. But the Financial Consumer Agency of Canada (FCAC) haswarned that by using […]

Show those expenses who’s boss

Jesse Mecham says he takes offence when people speak ill of budgeting. “It irks me when they talk about the dreaded ‘B-word’. There’s nothing dreadful about it.” Mr. Mecham, creator of YouNeedABudget.com (YNAB) and author of a book with the same title, says that a budget should be the foundation of every financial decision we make and […]

Bankers and Brokers may be in agreement

A new survey suggests Canadian bankers may be less concerned about mortgage credit risk than they were two years ago or, indeed, the government is now, given speculation it will again tinker with the country’s mortgage rules. While credit risk topped the list of concerns for Canadian bankers participating in the 2010 Banking Banana Skins […]

No housing crash for Canada: BMO

Canada will likely avoid a crash or serious correction in its “somewhat pricey” housing market, with the possible exception of Vancouver, says a new paper from Bank of Montreal. The analysis by BMO economists suggests alarms about Canada’s housing market by international observers, from the International Monetary Fund to The Economist magazine, are exaggerated or […]

CMHC backing fewer loans

Canada Mortgage and Housing Corp. is cutting back on mortgages it insures as the Crown corporation edges closer to a $600-billion cap imposed on it by the federal government, the Financial Post has learned. A CMHC spokesman confirmed that it had approached a number of lenders at the end of 2011 about reducing its “bulk or portfolio […]

CMHC Insurance Limits: A Wake-up Call for Lenders

Many have now seen thisNational Post article. The gist of it: CMHC is approaching its $600 billion government-imposed limit on issuing mortgage default insurance. That’s happening largely because of lenders’ enormous appetite for something called portfolio insurance (a.k.a., “bulk insurance”). No one fully grasps the repercussions yet, but our sense is that the news is not […]

Don’t take an RRSP loan, unless…

Maxing out your RRSP is a smart move, but for most people an RRSP loan isn’t the way to do it. Despite promises of stellar long-term growth and the dangling carrot of big, fat refunds, people are finally figuring out that the only beneficiary of an RRSP loan is the lender, unless… 1. You’re in […]

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