RateHub Roundup: November 2015

by Jordan Lavin November 2, 2015 / No Comments

Autumn is officially underway, and the month of October brought some tricks and some treats when it comes to personal finance. The biggest catalyst of change will undoubtedly be the federal election. The Liberals promised a mixed bag of financial candy – some sweet, some sour, some that will probably get thrown away because it looks a little suspect, and maybe even a box or two of raisins. Here’s a preview of what the new government means for your finances, and this month’s headlines.

Can you afford a $500 mortgage increase?

According to a recent BMO survey, 16% of Canadians said they couldn’t afford to spend an extra $500 a month on their mortgage, and another 27% would need to review their budget if that happened. For most people, it’s not going to happen overnight, but it’s possible that mortgage rates could start moving higher in 2016. That’s partially because the new Liberal government has promised a shift in monetary policy that could take some pressure off the things that are keeping interest rates low. Don’t worry too much about a price shock, though. Rates would have to increase significantly for the average mortgage to go up $500 a month. You can find out exactly what a rate increase would mean for you using our handy mortgage calculator.

Apple Pay is coming to Canada

Mobile payments have yet to catch on in Canada, but that could be about to change as Apple has announced its version will expand to Canada by the end of 2015. Right now, only 10% of Canadians use their phones to make payments on a weekly basis, and it’s not a stretch to guess a vast majority of those payments go to a certain chain of coffee shops. There’s a catch, though – it will only be available to American Express cardholders. Some Amex cards come with great rewards programs, so it could be a win-win if you’re excited about being an early adopter.

Your TFSA could be in danger

Okay, maybe danger is a little extreme. But there’s a good chance the contribution limit could be reduced in 2016 to $5,500, where it stood in 2014. There’s even a chance the reduction will be made retroactive to this year, but that could end up being a logistical nightmare. Over half of adult Canadians have opened a TFSA, but only a small portion have actually maxed them out – less than one in five as of 2013. If you haven’t maxed out your TFSA (or if you haven’t started one), there’s a good chance you might not notice the change anyway. If you were 18 when they were introduced in 2009, your lifetime contribution limit (as it stands) is $41,000.

It’s winter tire time

Unless you live in Victoria or Vancouver, chances are it’s time to put on your winter tires for the season. In Ontario, new rules starting January 1st will guarantee you a discount on your car insurance if you use four winter tires. It’s a nice thought, but many car insurance companies already give a discount to customers who swap out for the season. This article in the Toronto Star points out the cost of snow tires probably outweighs any insurance savings you might get for using them, but we see it more as an exercise in self-preservation.

Need help with your mortgage?

Just ask Ed Sheeran. The superstar recently took credit for helping a friend pay off her mortgage after she helped him pen Thinking Out Loud, the hit song that helped make him a household name in North America. If songwriting isn’t your strong suit, you can now get a little help from the Government of Newfoundland and Labrador. Premier Paul Davis announced a two-year pilot project to offer down payment loans of up to $12,500 to help first-time homebuyers get into the market. To qualify, homebuyers will need to have a mortgage pre-approval, and have a household income of less than $65,000. Participants in the program will also have to start paying the money back after five years.

Team Updates

How do you make your plastic pay? The Globe and Mail asked, and our founder, Alyssa Richard, answered. Click here to read the feature.

Thanks to everyone who joined us at the Canadian Personal Finance Conference – especially the fantastic speakers and people who worked hard to make the weekend a success. We learned a ton and can’t wait for next year!

And congratulations to the winner of our $1,000 Down Payment Power-Up Contest, Pat Harrison from Victoria, BC! Pat is now a thousand dollars richer, just because she signed up for our newsletter. The contest is over, but you can still subscribe to our newsletter to get updates on personal finance stories, mortgage rates, credit card offers and more. You can also keep up with us on Facebook, Twitter, Instagram, and Google+.