By Chris Fournier Bloomberg Erik Hertzberg Tues., May 29, 2018 OTTAWA—Canada sets interest rates Wednesday, and there’s widespread concern about what any further borrowing-cost increases might mean for consumers, their immense pile of debt and the housing market. It’s one of the reasons to be bearish on Canada. Steve Eisman, who was featured in Michael Lewis’s book The Big Short, told Bloomberg TV this month that investors should short Canadian financials, citing looming housing “issues.” The country’s largest lenders are warning against overplaying the concerns. While unprecedented debt levels pose risks, they say there won’t be any major upset to the economy for a number of reasons, including the view Bank of Canada Governor Stephen Poloz won’t press ahead with higher rates if signs of stress begin to emerge. While the debt levels are a problem, “we don’t expect it to derail the economy, just … [Read more...] about Canada’s banks downplay concerns about household debt, interest rates
How mortgage rates are set
Let's start by defining what we're talking about - how does the typical Singaporean use their first property as a pure investment asset? The simplest way to do this is to buy a private property, but not move into it. Instead, you continue to live with your parents, while renting out your private property. Ideally, the rental income from your property will more than cover the mortgage repayments - and when you sell the property in five to 10 years, you will profit as the property has appreciated. Another way to treat your first home as an investment is to still live in it, but simply hope that you've picked a property that will appreciate. An example of this is choosing to buy in a non-mature estate, where many amenities (shopping centres, train stations, hawker centres, etc.) have not yet been built. This is based on the theory that, as these amenities are built up, the property value will rise. Finally, some daring speculators will even buy an aging development (one with 40 years or … [Read more...] about How are Singaporeans using their first property as an investment?
By David Paddon The Canadian Press Mon., May 28, 2018 Canada’s big banks are locked in a competitive pricing war over variable-rate mortgages, but economic trends point to more interest rate hikes ahead — leaving Canadian mortgage borrowers struggling to interpret the mixed messages. The Bank of Canada has raised its trend-setting interest rate once this year and is expected to do so at least once more before the end of 2018. When interest rates rise, banks are inundated with demand for fixed rates, so borrowers can lock in their rates. As a result, Canada’s lenders are working to attract borrowers to variable-mortgage rates, which are tied to the fluctuations of the central bank’s overnight rate. They are offering special rates as low as 2.45 per cent for May, some of the biggest-ever widely advertised discounts advertised by the big banks. At the same time, they have increased the rates of their fixed-rate mortgages. Even in this rising … [Read more...] about Mortgage rates are rising. Here’s how you can save money
US Federal ReserveJerome Powell Five big themes likely to dominate thinking of investors and traders in the coming week and the stories related to them By Reuters March 19, 2018 12:44 PM (UTC+8) Share Tweet Linkedin Print Email Share 0 Comment 0 1. Fed A-head The US Federal Reserve’s first meeting with new head Jerome Powell at the helm takes place on Tuesday and Wednesday and an interest rate rise – this year’s first – is seen as a done deal. Against the backdrop of brewing inflationary pressures, mortgage rates and Treasury yields have been rising and risk assets including equities and junk debt prices have been exhibiting signs of stress. The dailyReport Must-reads from across Asia - directly to your inbox World investors will be paying close attention to the wording of the Fed statement for clues on whether Powell and co think conditions are now strong enough to hike rates beyond the three the financial markets have been forecasting. Oh, … [Read more...] about US Federal Reserve rate rise expected under Powell
While homes represent the lion’s share of assets for many individuals and families, they can also entail the biggest financial burden. Refinancing can offer ways for homeowners to more easily secure a debt-free future, but with so many options on the table, picking the right rate (and lender) can be a tricky task for the laypersonWhile homes represent the lion’s share of assets for many individuals and families, they can also entail the biggest financial burden.With such high stakes, it’s worthwhile for those whose mortgage teaser rates are set to lapse (or already have) to consider a refinancing option to lower their monthly bills.Local mortgage lenders typically offer a teaser rate - lower interest than normally offered - for the first three years to attract borrowers. Those who refinance ahead of the lapse of the teaser period are subject to a prepayment penalty (typically 3% of the initial outstanding amount).Refinancing as a rule allows borrowers to lower monthly … [Read more...] about Finding a mortgage rate that leaves you home free