RateHub Roundup: May 2016

by Jordan Lavin May 2, 2016 / No Comments

Homeownership seems to be a barometer of financial success for many Canadians. It’s not only a sign of wealth, but a milestone that many young people see as a turning point from supporting someone else’s future to working toward their own. And thanks in part to low mortgage rates, two-thirds of millennials expect to be able to afford a home. Whether you’re planning to buy a home or not, it never hurts to be on top of the latest trends in housing and personal finance. Here’s a roundup of our favourite stories from the month:

Would you just like one condo, or will you be taking advantage of our convenient three-pack?

A study by the Canada Mortgage and Housing Corporation (CMHC) did a survey of condo owners in Toronto and Vancouver last month and discovered that the number of private condo investors who own more than one unit is rising. According to the study, about 25% of condo owners have more than one unit and about 10% own three or more. Of those multiple-unit owners, half said they purchased for rental income and most thought the value of the unit would go up or at very least stay flat. An important (to some) topic the survey didn’t cover is foreign ownership. In fact, it omitted foreign ownership from the conversation completely, choosing only to survey households who own and live in the Toronto and Vancouver census metropolitan areas (CMAs). Corporately owned condos were also left off this list.

HIV-positive? You can now get life insurance in Canada

HIV treatments have come a long way and now Manulife has become the first insurer in this country to offer an underwritten life insurance policy to people with HIV. The company has already announced that coverage of up to $2-million will be available to people who have tested HIV-positive who are between 30 and 65. As with any pre-existing condition, the coverage isn’t a sure thing. Manulife hasn’t announced the specific details yet, but it’s safe to assume the same conditions will apply as with any other chronic disease. Applicants will need to prove the infection is well managed and that there are no other conditions threatening their health.

Would you buy life insurance from a robo-advisor?

At RateHub, we’re big fans of robo-advisors. They’re the online services that help you invest money in a way that’s convenient (no going to visit a financial advisor in an office block somewhere) and efficient (computers keep track of your money and make changes without the need for human intervention or the risk of human error). Today, Canadians can use robo-advisors to buy financial products like stocks, bonds, and ETFs, but soon you might also be able to use a robo-advisor to buy life insurance as well. The question is, will you buy it? A lot of people don’t see life insurance as something that’s necessary (at least compared to car insurance or home insurance). And a lot more aren’t really sure how life insurance works.

Canadians are hungry for better savings account rates

The best savings account rate in the market is a little bit lower than it used to be. EQ Bank, the new digital bank that launched in Canada earlier this year, dropped the interest rate on its Savings Plus Account this month from 3% to 2.25%. It’s still the best rate in the market by far, even when compared to teaser rates offered by competitors like Tangerine. But the overwhelming popularity of the bank—EQ has reportedly signed on 17,000 customers as of March—shows that Canadians are willing to change banks to get a better deal. There’s just not enough competition to keep rates high. No bank matched EQ Bank’s 3% offer it they launched in January and the next-leading savings accounts in Canada offer interest rates around 1.95%.

How many tickets is the limit?

Answer: 14. A woman from Vancouver has finally lost her license after racking up a total of 14 tickets for distracted driving. According to police, her 14th and final $167 ticket was issued after almost crashing into a police officer while she was using her phone behind the wheel. In other provinces with private car insurance programs, most insurers would cancel your policy before you ever managed to get that many tickets. Under B.C.’s private insurance system, however, drivers who are ticketed are charged a driver penalty point premium based on how many points they receive. Fourteen three-point tickets equals a surcharge of $16,160 in addition to the driver’s regular insurance premium. There’s good news for everybody in this story though. For the driver, surrendering her license could save her a lot of money on those penalties. And for the rest of us, this very distracted person is moving from four wheels to two feet.

A different kind of foreign homebuyer

The news is full of stories of people from other countries buying up Canadian houses and the affect it may or may not have on the market. The classic (if you will) version of the story usually involves investors from China scooping up houses and condos in Vancouver and Toronto to use as investment properties. But this story is a little different. A community in Washington state’s San Juan Islands has looked north—or actually, west—to solve its housing crisis. A non-profit group in the town of Friday Harbor, Wash. has discovered it’s just as easy and cost effective to move old houses from nearby Victoria, B.C. as it is to build new ones. The process involves buying old Canadian houses, transporting them by barge to their new locations, and restoring them to their former glory. The project is a win on both sides of the border, because tough environmental laws in B.C. have made it increasingly expensive to tear down an existing property. Recycling really does pay off.

RateHub Updates

Do you have #FOMO (fear of missing out)? We want to know! Take our quick survey about what impact FOMO has on your finances, and we’ll enter you in a draw for a chance to win an iPad mini!

Who’s your celebrity (financial) soul mate? Will you be matched with the extra frugal Carrie Underwood
(who does her own grocery shopping and brings coupons)? The reckless spending of Lindsay Lohan? Or someone in between? Take our quiz to find out.

We are teaming up with Startup Canada for Startup Canada Day on the Hill, a networking event with 1,500 entrepreneurs and leading anchor companies. If you’re interested in starting a business, this is your opportunity to connect with leaders, find mentorship, participate in pitch competitions, and connect with the who’s who of entrepreneurship and innovation. The event is at the Shaw Centre in Ottawa on May 5 from 9 a.m. to 7:30 p.m. Tickets are on sale now, and you can use promo code STARTUPDAY25 to receive 25% off. We hope to see you there!

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