In Case You Missed It

The Bank of Canada hit us with another rate increase today.*  This was not a surprise to anybody, anywhere.

But, expecting something unpleasant to happen doesn’t make it hurt any less. From coast to coast, Canadians will buckle a little more under the burden of lines of credit, HELOCS, variable rate mortgages, etc.

Fact is, as rates rise, interest-only payments go up.  Likewise, combined interest plus principle payments suffer from the dreaded “Less for Me, More for Them” syndrome.**

The party won’t end here.

The Bank of Canada has made it very clear that additional rate increases are in our future.  How fast & furious these increases will occur remains to be seen.

An overriding target of 2% inflation is their reason for most of what they do.

6 aiming for 25

 

Sure, 2% inflation is a challenge if you are the BoC but many competing forces from various global and local economic & political factors are at play.  Mathematical calculations on government letterhead apparently make sense to some politicians even when the final numbers deliver a real-life punch in the face for individual Alberta families.

We already have a lot to deal with in this province.  Many, many people I work with on a daily basis continue to wrestle with the ugly fallout from the oil crises.

  • Young folks, graduating with the latest skills, face a bleak employment landscape.
  • Retirees trying to downsize are finding that buyers aren’t showing up.
  • Skilled workers with decades of employment history under their belts are signing up for contract and piece work.

Emerging from a period of historically low interest rates hurts.  The pain is inevitable.  We all expected it but we don’t have to like it.***  Adjustments will be required, personally and professionally.

The wisest course of action is to know your options.

If you are looking to get a handle on changing loan terms, interest rate trends and what it all means for you and yours, call me today. 

*Take a gander at the Band of Canada’s take on their latest interest rate play here:  https://www.bankofcanada.ca/2018/10/fad-press-release-2018-10-24
**Either at renewal date for fixed rate obligations or right away for variable rate loans of all types.  In other words, ouch. And, ouch. *@!%@@!*
***With the possible exception of non-indebted, fixed-income investors.  This sector of our population should be basking in rate increases.  The benefits, though, have not yet trickled down.

Author: Kevin and Leanne

Real Estate Agent with RE/MAX Real Estate Mountain View.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s