Calgarypuck Forums - The Unofficial Calgary Flames Fan Community
Old 01-21-2015, 08:50 AM   #1
Mortgage Made Easy
Crash and Bang Winger
 
Mortgage Made Easy's Avatar
 
Join Date: Sep 2014
Location: Calgary, AB
Exp:
Default Bank of Canada cuts key rate by 0.25%

The Bank of Canada unexpectedly cut its main interest rate by 0.25% from 1.00% to 0.75%.

This is great news for Variable Mortgage rate holders, students loans and lines of credits as Prime should follow... and drop from 3.00% to 2.75%.

NOTE that Prime is adjusted by the lenders. Typically they follow suit but not always... will post once we get word from at least one lender.

For anyone with variable loans/ mortgages... keep payments the same or higher and take advantage of paying down the debt quickly.
__________________
Thanks,
Tim
Mortgage. Made Easy Experts
Kardia Mortgage Inc
www.TimLacroix.com

If you have any questions please feel free to PM me or email puckforum@cgymortgage.com

Click here to View current Mortgage Rates

Mortgage Made Easy is offline   Reply With Quote
The Following 2 Users Say Thank You to Mortgage Made Easy For This Useful Post:
Old 01-21-2015, 08:53 AM   #2
chemgear
Franchise Player
 
Join Date: Feb 2010
Exp:
Default

LOL, 80 cent CDN dollar. Damn.
chemgear is offline   Reply With Quote
Old 01-21-2015, 08:56 AM   #3
calgarygeologist
#1 Goaltender
 
Join Date: Dec 2013
Exp:
Default

Party time?
calgarygeologist is offline   Reply With Quote
Old 01-21-2015, 09:22 AM   #4
Bill Bumface
My face is a bum!
 
Bill Bumface's Avatar
 
Join Date: Feb 2003
Exp:
Default

Why???

How does this help anything?

Do they actually think consumers borrowing even more is going to help? How will they ever get it back up when things like this encourage debt levels to increase? Aren't they just shooting us in the foot when inflation gets out of hand and rates NEED to react in the future?
Bill Bumface is offline   Reply With Quote
The Following User Says Thank You to Bill Bumface For This Useful Post:
Old 01-21-2015, 09:24 AM   #5
Mortgage Made Easy
Crash and Bang Winger
 
Mortgage Made Easy's Avatar
 
Join Date: Sep 2014
Location: Calgary, AB
Exp:
Default

Wow... the 5 Year Bond Yield fell below 1.00% and is currently sitting at 0.799%.

Dollar is down to $0.8121.

Get ready for a roller coaster ride.
__________________
Thanks,
Tim
Mortgage. Made Easy Experts
Kardia Mortgage Inc
www.TimLacroix.com

If you have any questions please feel free to PM me or email puckforum@cgymortgage.com

Click here to View current Mortgage Rates

Mortgage Made Easy is offline   Reply With Quote
Old 01-21-2015, 09:26 AM   #6
Ducay
Franchise Player
 
Ducay's Avatar
 
Join Date: Feb 2006
Exp:
Default

Quote:
Originally Posted by hulkrogan View Post
Do they actually think consumers borrowing even more is going to help? How will they ever get it back up when things like this encourage debt levels to increase? Aren't they just shooting us in the foot when inflation gets out of hand and rates NEED to react in the future?
You know they don't really do it for consumer rates, its more-so on the commercial end to spur investments(spending).
Ducay is offline   Reply With Quote
Old 01-21-2015, 09:30 AM   #7
DoubleK
First Line Centre
 
DoubleK's Avatar
 
Join Date: Aug 2012
Location: Calgary, AB
Exp:
Default

Is this a good time to increase the amount paid against my mortgage? I am on a 5 year variable.
DoubleK is offline   Reply With Quote
The Following User Says Thank You to DoubleK For This Useful Post:
Old 01-21-2015, 09:32 AM   #8
nik-
Franchise Player
 
nik-'s Avatar
 
Join Date: Jun 2004
Exp:
Default

Quote:
Originally Posted by DoubleK View Post
Is this a good time to increase the amount paid against my mortgage? I am on a 5 year variable.
Do you mean increase the payments or lock in at a low rate and leave the payments the same?

At these rates you're going to beat your mortgage interest rate pretty easily by investing the extra money in the market.
nik- is online now   Reply With Quote
Old 01-21-2015, 09:34 AM   #9
Ducay
Franchise Player
 
Ducay's Avatar
 
Join Date: Feb 2006
Exp:
Default

Quote:
Originally Posted by DoubleK View Post
Is this a good time to increase the amount paid against my mortgage? I am on a 5 year variable.
What Nik said. Now keeping cash on hand is cheaper, so you're better off paying less (if you can). Pay off more when interest rates are higher.
Ducay is offline   Reply With Quote
Old 01-21-2015, 09:36 AM   #10
Bill Bumface
My face is a bum!
 
Bill Bumface's Avatar
 
Join Date: Feb 2003
Exp:
Default

Quote:
Originally Posted by Ducay View Post
You know they don't really do it for consumer rates, its more-so on the commercial end to spur investments(spending).
It seems there should be a way to decouple commercial and personal lending rates, as people just get dumb with low interest. Mind you so do governments. It all just seems like a pretty bad sign of things.
Bill Bumface is offline   Reply With Quote
Old 01-21-2015, 09:40 AM   #11
DoubleK
First Line Centre
 
DoubleK's Avatar
 
Join Date: Aug 2012
Location: Calgary, AB
Exp:
Default

I didn't mean to lock it, I meant to raise the payment amount so I'm paying more of the principle down because the rates are low.

How does one figure that out vs increasing RRSP contributions.

Currently, I increase RRSP contributions at the same rate as my salary increases.
DoubleK is offline   Reply With Quote
Old 01-21-2015, 09:42 AM   #12
nik-
Franchise Player
 
nik-'s Avatar
 
Join Date: Jun 2004
Exp:
Default

Quote:
Originally Posted by DoubleK View Post
I didn't mean to lock it, I meant to raise the payment amount so I'm paying more of the principle down because the rates are low.

How does one figure that out vs increasing RRSP contributions.

Currently, I increase RRSP contributions at the same rate as my salary increases.
Take the extra money and invest in a stable blue chip that pays a decent dividend. A Bell for example ... or something else.
nik- is online now   Reply With Quote
Old 01-21-2015, 09:55 AM   #13
Zarley
Powerplay Quarterback
 
Zarley's Avatar
 
Join Date: Jan 2013
Exp:
Default

Seems like a good time to pick up some undervalued, dividend paying energy stocks on margin.

Last edited by Zarley; 01-21-2015 at 09:57 AM.
Zarley is offline   Reply With Quote
Old 01-21-2015, 09:56 AM   #14
OMG!WTF!
First Line Centre
 
Join Date: Oct 2014
Exp:
Default

Quote:
Originally Posted by DoubleK View Post
I didn't mean to lock it, I meant to raise the payment amount so I'm paying more of the principle down because the rates are low.

How does one figure that out vs increasing RRSP contributions.

Currently, I increase RRSP contributions at the same rate as my salary increases.
I think the standard answer for that is to max your rrsp contributions and use the resulting tax savings to pay down debt...your most expensive debt first (credit card or unsecured loans) then your mortgage.

Things are a bit different now with a tfsa. If you can, make sure that's up and running with some dividend or interest baring holdings. Any US dividend paying stocks should be held in your tfsa. Simply holding cash isn't the end of the world now either.

If you're wondering if your return in your rrsp will be better than the 3-4% you're paying on your mortgage, that's anyone's guess.
OMG!WTF! is offline   Reply With Quote
Old 01-21-2015, 10:05 AM   #15
GP_Matt
First Line Centre
 
GP_Matt's Avatar
 
Join Date: Jun 2011
Location: Edmonton
Exp:
Default

I think you are crazy to put money in an RRSP if you have credit card debt. At 18-25% interest on the cc debt you will never make that inside your RRSP.
GP_Matt is offline   Reply With Quote
Old 01-21-2015, 10:15 AM   #16
bomber317
Powerplay Quarterback
 
bomber317's Avatar
 
Join Date: Jan 2008
Location: Calgary
Exp:
Default

Quote:
Originally Posted by OMG!WTF! View Post
Things are a bit different now with a tfsa. If you can, make sure that's up and running with some dividend or interest baring holdings. Any US dividend paying stocks should be held in your tfsa. Simply holding cash isn't the end of the world now either.
Just an FYI on holding US Dividend paying holdings in your TFSA. The dividends are taxed before you receive your dividend.

However, holding US dividend paying holdings in your RSP account will give you dividend payouts tax free.
bomber317 is offline   Reply With Quote
Old 01-21-2015, 10:16 AM   #17
Mortgage Made Easy
Crash and Bang Winger
 
Mortgage Made Easy's Avatar
 
Join Date: Sep 2014
Location: Calgary, AB
Exp:
Default

Quote:
Originally Posted by DoubleK View Post
Is this a good time to increase the amount paid against my mortgage? I am on a 5 year variable.
There is definitely a balance to what to do with extra / discretionary money.

I would definitely keep your mortgage payments where they are or higher depending on your overall financial plan and current debts (paying of high interest debt is also good to get our of the way first).

One of the strategies we suggest to clients on variable, is to set payments as if they took a fixed rate. The difference goes to principal and you take advantage of the low rates. This also sets a budget and then do some investing, savings, etc.

If Bank of Canada raises the rate, then you can allow the payment to absorb the interest increase or better yet, increase your payment to maintain the spread. Again this suggests that your budget and financial situation is still good.

Everyones situation is different and understanding your overall financial will help you determine your best options.
Mortgage Made Easy is offline   Reply With Quote
Old 01-21-2015, 10:23 AM   #18
chemgear
Franchise Player
 
Join Date: Feb 2010
Exp:
Default

Quote:
Originally Posted by GP_Matt View Post
I think you are crazy to put money in an RRSP if you have credit card debt. At 18-25% interest on the cc debt you will never make that inside your RRSP.
From the numbers I've seen, roughly a quarter or a third of half of Canadians carry a credit card balance. Seems like a freaking crazy high percentage to me but then again, we do carry a crap ton more debt than Americans or even the Greeks.

Borrow more baby, keep borrowing! It's free!
chemgear is offline   Reply With Quote
Old 01-21-2015, 10:29 AM   #19
squiggs96
Franchise Player
 
squiggs96's Avatar
 
Join Date: Nov 2009
Location: Section 206
Exp:
Default

Quote:
Originally Posted by Mortgage Made Easy View Post
For anyone with variable loans/ mortgages... keep payments the same or higher and take advantage of paying down the debt quickly.
So mortgage money is the cheapest it's been in 4 years, and you want people to keep the payment the same? I don't get it. Why not lower your payments and use this money to invest? For those that have credit card or other debt, wouldn't it make sense for them to pay down those? I understand want to get out of debt, but there are many valid reasons why you drop your payments now with the interest rate drop, especially when mortgage interest is not calculated in advance.
__________________
My thanks equals mod team endorsement of your post.

Quote:
Originally Posted by polak
nvm stupid comment
squiggs96 is offline   Reply With Quote
Old 01-21-2015, 10:33 AM   #20
OMG!WTF!
First Line Centre
 
Join Date: Oct 2014
Exp:
Default

Quote:
Originally Posted by bomber317 View Post
Just an FYI on holding US Dividend paying holdings in your TFSA. The dividends are taxed before you receive your dividend.

However, holding US dividend paying holdings in your RSP account will give you dividend payouts tax free.
Oh damn. I meant to type RSP not tfsa for your US dividends. My bad. Defeats the purpose of tax free.
OMG!WTF! is offline   Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 04:05 PM.

Calgary Flames
2017-18




Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
Copyright Calgarypuck 2016