The biggest news of the new year: Home ownership is going to get even more expensive as interest rates go up and new federal rules take effect. But that’s not all — here are some personal finance headlines you may have missed last month:
Bank of Canada hikes benchmark interest rate to 1.25%
With the economy running at capacity and unemployment at a record low, Canada’s central bank raised its target overnight lending rate to 1.25% on Jan. 17. After years of near-zero interest rates, the third hike in six months will be immediately felt by borrowers with variable rate mortgages, HELOCs, and personal lines of credit. Each of Canada’s Big Six banks also hiked their mortgage rates ahead of the announcement. If you’re hoping to enter the housing market in 2018, check out the following articles:
- Qualifying For a Mortgage in 2018: An Overview
- How To Stress Test Your Mortgage
- Are Recent Mortgage Rate Increases Really Worth Worrying About?
This will be the year that kills home-ownership dreams for many aspiring first-time buyers
Rob Carrick with a reality check: “As expensive as houses in some cities are, they may never be as accessible to the first-time buyer as they are today.” Carrick lays out three reasons why homebuyers will have to jump in now, or “move on with their lives” (aka buy a condo, move somewhere cheaper). First, higher interest rates and stricter mortgage rules will only further erode affordability in markets like Toronto, Vancouver, and Victoria, singled out as the most unaffordable in a recent RBC Economics report. This probably isn’t a surprise to the good people of Vancouver, where 73% of detached houses in the metro area are valued at $1 million or higher, compared to 43% in 2015. Second, there’s always the possibility of even tighter government regulations that make it harder to get a mortgage. Lastly, higher interest rates and lower house prices don’t necessarily offset each other.
Loblaw, Walmart, Sobeys, Metro, Giant Tiger allegedly involved in alleged bread price-fixing scheme: Court documents
Unsealed court documents reveal more major grocers were allegedly involved in a 14-year bread price fixing scheme. As reported by the Toronto Star, “the agreed-upon price increases were on average, about 10 cents per product per year, with seven cents going to the suppliers and three cents to the retailers.” Sobeys Inc. and Metro Inc. deny the allegations, which have not been proved in court. Loblaw received immunity from prosecution after it admitted to its role and offered $25 gift cards to eligible consumers.
How the PC Optimum program works
The merged Shoppers Drug Mart-Loblaws PC Optimum program arrived on Feb. 1. Read Ratehub.ca’s guide to how the program works, the points value structure, and how to earn and redeem points.
You might have seen Ratehub.ca co-founder and CEO Alyssa Furtado’s successful bid on Dragon’s Den in mid-2016, but there’s even bigger news from our office: Ratehub.ca secured a $12-million Series A financing deal, led by Boston-based venture firm Elephant Partners LP.
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