• Hi Guest: Welcome to TRIBE, the online home of TRIBE MAGAZINE. If you'd like to post here, or reply to existing posts on TRIBE, you first have to register. Join us!

Bank of Canada rate

justin surdit

TRIBE Member
Some lenders require you to only convert to a fixed rate term equal to or longer than the remaining amount of time on the variable rate contract...so if there were 5 months left you can convert to a minimum 6 month term (or longer)...if there were 7 months left you could convert to a 1 year term (or longer).

Other lenders have a minimum required term that HAS to be converted into no matter how far along you are on the current variable rate mortgage, although not very many do this any more. In this example, even if you had 1 month left on your term and you went to convert, you would have to convert to the minimum required term as outlined at the time you took your variable rate (eg. 5 years) etc.
 

AdRiaN

TRIBE Member
416 said:
You can't make a general statement like that because you don't know when an individual is going to take a fixed rate in relation to what's going on in the market.
Fine, I will qualify my statement.

You will always be better off with a variable rate mortgage unless you are able to perfectly time the money markets over the next 30 years. :rolleyes:
 

T_Dot_House

TRIBE Member
If we have 50 year low rates, then shouldn't we have 50 year low mortgage rates too? I think my logic makes sence in theory..
 

AshG

Member
bombthreat23 said:
oh boy.
this is not too hard to figure out. on the outset of a recession the rates will drop as the guv tries to get businesses and people access to capital. The problem is inflation, and during inflation the guv will restain capital flow...thus resulting in...HIGHER RATES. I don't know a single lender right now not telling people to lock in right now, anywhere near 5% you should lock in.
i hope for your own sake that you aren't running a mortgage right now. if you are, you need to do some research.
 

octo

TRIBE Member
so BoC has been lowering it's rate. interest rates "are at an all time low."
yet, mortgage rates are higher right now than they were a few months ago?

are they going to shoot up to the levels of the 90s recession?

can i expect a low interest rate on a car loan?
 
tribe cannabis goldsmith - gold cannabis accessories

416

TRIBE Member
AdRiaN said:
Fine, I will qualify my statement.

You will always be better off with a variable rate mortgage unless you are able to perfectly time the money markets over the next 30 years. :rolleyes:
You don't need to perfectly time shit, son. You just need to pay attending to the BOC and bond rates which you should be doing if you have a couple hundred thousand dollar tied up in it.
 

SneakyPete

TRIBE Member
Bank of Canada cuts to record low 1%

Commercial banks chop prime rates

Paul Vieira, Financial Post Published: Tuesday, January 20, 2009


In the face of an "intensifying" financial crisis, the Bank of Canada cut its benchmark lending rate Tuesday by another 50 basis points, to a record low 1%, on the belief the domestic economy will contract 1.2% this year and experience two quarters in which inflation dips below zero.

The bearish outlook is in stark contrast to the central bank's previous projection, of 0.6% economic growth this year, issued last October. There was also no indication in the fall outlook that total inflation, which includes volatile items such as food and energy, would dip below zero. As a result, total and core inflation are expected to reach the bank's preferred 2% target in the first half of 2011, as opposed to the end of 2010.

The bank also warned that the "stabilization" of the global financial system is a "precondition" for economic recovery.

The updated projections provide a preview of what's in the offing in the latest edition of the central bank's monetary policy report, scheduled for release on Thursday.

The latest reduction means the Bank of Canada has reduced its overnight rate target by 350 basis points in the last 13 months. The central bank indicated it would continue to monitor developments to judge "what extent further monetary stimulus" would be required, leading some analysts to believe another half-percentage-point reduction is coming in March.

Bank of Montreal appeared to be the first chartered bank to match the central bank's move, saying in a statement it was decreasing its prime rate to 3% from 3.5%, effective Wednesday. Most of its competitors quickly followed.

The size of Tuesday's rate cut, anticipated among the majority of Bay Street economists, comes as data suggest weakness in the Canadian economy has spread from the trade sector to household spending and the labour market, and that businesses' assessments of the growth outlook have turned sharply negative. Financial traders had bet the central bank would undertake a deeper rate cut, of 75 basis points, matching its last move on Dec. 9.

"The outlook for the global economy has deteriorated since the bank's December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity," the bank said in a statement explaining its half-percentage-point cut. "Heightened uncertainty is undermining business and household confidence worldwide, and eroding domestic demand."

Industrialized economies, including Canada, are in recession, the bank said, adding emerging market economies, whose demand for commodities drove growth this decade, are "increasingly affected."

Just as the Bank of Canada released its rate decision, Statistics Canada reported that manufacturers posted their biggest monthly sales decline on record in November. Statscan said sales were down 6.4% to $48.4-billion during the month, compared to economists' forecasts of a 2.5% decline.

Based on sharp reductions in exports, and declines in incomes, household wealth and consumer confidence, the bank now projects the Canadian economy to contract 1.2% in 2009. But it expects economic growth to rebound by a healthy 3.8% in 2010, as fiscal and monetary policy actions take hold and a lower Canadian dollar makes our exports cheaper for the rest of the world.

Further, the central bank now believes total inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. It expects core inflation, which removes volatile elements like energy from the equation, to reach a bottom of 1.1% in the fourth quarter.

With inflation expectations "well-anchored," the bank said total and core inflation should return to its preferred 2% target in the first half of 2011. The bank sets its key-lending rate to ensure inflation is at the 2% mark.

In its fall forecast, the Bank of Canada expected inflation of 1% by the second half of this year and core inflation of 1.6%.

"Low, stable and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability," the central bank said.

Pascal Gauthier, economist at Toronto-Dominion Bank, said he expects the bank to cut rates again, by another 50 basis points, at its March 3 decision - and stay at 0.50% for some time. "Given the considerable amount of remaining uncertainty and the fact that the Canadian recession has just started, the rate is expected to stay at this record low well into 2010 before inflation starts registering on the radar again."
http://www.financialpost.com/story.html?id=1197505
 
tribe cannabis goldsmith - gold cannabis accessories

DJ Doublecross

TRIBE Member
I now earn a higher interest rate on my ING savings account than I pay on my mortgage!

I wonder if I can turn this into free money somehow....
 
tribe cannabis accessories silver grinders

TaCk OnE?

TRIBE Member
CIBC is still saying prime is 3.5, they better drop it to 3 as well.

then I'll be just over 2.5%, which is kind of insane.
 

kuba

TRIBE Member
The article in the Toronto Star is stupid. The main guy on the business section is complaining about his $10,000 student loan linked to prime, and how he wishes that the banks passed the savings on, so that he can save for his daughter's education. On $10K, the difference between 3.5% and 3% is negligible and won't be enough to save for anything. I wish the reporting was more accurate, or perhaps less focused on such a non-issue.
 

kyfe

TRIBE Member
I can't wait till April when my variable rate locks in again. I could be as low as 1.75 if there's another drop.
 

Jeffsus

TRIBE Member
I'd like to note that my line of credit is now lower interest than my mortgage...

and my mortgage was "a very good rate" a year ago...

-jM
A&D
 

Bernnie Federko

TRIBE Member

Interest rate cuts in 2015 have done their job and the Bank of Canada needs to consider its options as excess capacity in the economy is used up, Bank of Canada Governor Stephen Poloz said on Wednesday in a CNBC interview in Europe.

Poloz said Canada had unexpectedly strong growth in the first quarter and that while the central bank expects growth to slow moderately, it will not slow down dramatically.

"It does look as though those cuts have done their job. But we're just approaching a new interest rate decision so I don't want to prejudge," he said in the interview.

"But certainly we need to be at least considering that whole situation now that the capacity excess capacity is being used up steadily."

The Bank of Canada cut rates twice in 2015 to counter the effects of an oil price shock that sideswiped the Canadian economy. In recent weeks policymakers have shifted to a more hawkish stance, and many economists expect a rate hike before the end of the year.


Chances of a Bank of Canada rate increase in July rose to 43 per cent on Wednesday from 30 per cent the day before, while the loonie surged to a four-month high after the hawkish comments by Poloz.

Poloz said every major region is gathering momentum and the synchronized growth phase is a positive, though everyone is in a different phase of the business cycle.

"The U.S. obviously way out in front. Canada some distance, perhaps as much as two years behind, given the oil shock. And then a little bit behind of course Europe. So but we are all there for grappling with the same issues in sequence. Well you know that's good for collaboration," he said.

Poloz also said that uncertainty about NAFTA has been weighing on business investment, adding that the trade agreement between Canada, the United States and Mexico is a critical tool in Canada.

"By my understanding the actual negotiations will start later this summer and that they're all hoping for it to be relatively speedy. It suggests that they've got a tight agenda. And so let's keep our fingers crossed on that, that it's not a long, drawn-out process because of this, that it is a headwind," Poloz told CNBC.

He also said the Federal Reserve's rate hiking cycle is fundamentally good news because it means the U.S. economy is strengthening further, which is good news for Canada.
THE GLOBE AND MAIL, SOURCE: BLOOMBERG
 
tribe cannabis goldsmith - gold cannabis accessories

Bernnie Federko

TRIBE Member
Rate hike shows bank of Canada balking at inflation – at least, for now

“The Bank of Canada, a famously inflation-targeting central bank, is raising interest rates in defiance of its own inflation measures. At least for a while. The central bank’s willingness to seriously bend its own rules on inflation suggests a couple of possible explanations. One is that it has given up waiting for inflation to do what inflation is supposed to do in an economic recovery, and is turning to other economic signposts to guide its policy decisions. Another is that it has other reasons to lift rates off their floor and it is jumping through a window of opportunity before it starts to close. I’d suggest it’s a little from column A, a little from column B.”
 

kennyboy

TRIBE Member
I can't believe how many articles I've seen in the last day regarding the "panic" that a .25% rate increase potentially causes to people.

Really? Are you that close to the edge that a few extra $$ a month is the tipping point? Perhaps you shouldn't have been living like a rock star and using your home equity as a cash machine.

And I'll be the first to say I have a HELOC and have used it for some home Reno/ repairs but I never thought rates would stay low forever and tried to make the most of the opportunity to pay down more on the mortgage while the rates were so low.

I'm just going to sit back and see what the next few years have in store and hope for the best.
 

kyfe

TRIBE Member
I can't believe how many articles I've seen in the last day regarding the "panic" that a .25% rate increase potentially causes to people.

Really? Are you that close to the edge that a few extra $$ a month is the tipping point? Perhaps you shouldn't have been living like a rock star and using your home equity as a cash machine.

And I'll be the first to say I have a HELOC and have used it for some home Reno/ repairs but I never thought rates would stay low forever and tried to make the most of the opportunity to pay down more on the mortgage while the rates were so low.

I'm just going to sit back and see what the next few years have in store and hope for the best.

Apparently a lot of Canadians are carrying a wackload of debt. I don't really understand it myself but then again I only carry mortgage debt
 

Klubmasta Will

TRIBE Member
I am curious to see whether the increased interest rate, with promise of another likely increase before the end of 2017, when added to the already slower real estate market in the GTA (in part due to the cooling measures imposed on foreign buyers), will trigger the Toronto real estate market correction that folks have been predicting for many years. The last time Toronto had a real estate market correction was in 1988-89, when values dropped by 40%, and it took 10 years for values to reach their previous levels. I have seen a number of newsletters advising investors (in residential and multi-residential properties) that now may be the time to sell, as well as many articles about how residential sales in the GTA have slowed significantly. On the flipside are the arguments that (i) there are many capable buyers that have been sitting on the sidelines waiting for the buying frenzy to slow, so those buyers may soon enter the market, and (ii) new buyers may want to take advantage of interest rates while they are still low, to lock them in at low rates for 5 years.

Very often, these kinds of predictions become a self-fulfilling prophecy.

I was in the market for an investment property in Toronto, but may decide to hold off as a result of recent trends.
 

kennyboy

TRIBE Member
Apparently a lot of Canadians are carrying a wackload of debt. I don't really understand it myself but then again I only carry mortgage debt
Wackload of debt is one thing, and I agree I think there's a lot of people that are way over extended, but if 1/4 point puts you over the edge that's a scary thing. Not sure how you could sleep at night.

And I have a mortgage and bills and daycare and all that good stuff, but I would never write a check that your ass can't pay for. Guess too many people jumped on the free money train.
 
tribe cannabis accessories silver grinders
Top