Even as an adult, it’s hard to shake that back-to-school feeling. If you’ve been slacking on keeping up with the news this summer in favour of beach reads, now’s the time to catch up. It’s not as thick as Vogue, but our version of the September issue has all the personal finance news you might have missed last month.
CIBC and President’s Choice Financial announced the conscious uncoupling of their 20-year partnership in August, with CIBC unveiling plans for a new branchless bank called Simplii Financial. As reported by the The Globe and Mail, the split appears to be over controlling their respective financial products and services, plus all-important customer data. Roughly two million PC Financial accounts (everyday products such as chequing and savings accounts, RRSPs, TFSAs, and mortgage accounts) will switch over to Simplii as of Nov. 1, while PC Financial will retain its MasterCard credit cards, and focus on payment and loyalty programs. Here’s a good itemized breakdown of what the switch means for PC Financial customers.
This month in Canada’s housing soap opera: Resale prices rose 2% in July, but cracks are forming in the Toronto area as homes other than condos saw their sale prices decrease by 1.6%. One economist told BNN the Toronto price index could drop 7-10% over the next few months, due in part to rising interest rates and the 16-point housing affordability plan Ontario introduced in April. Of course, there’s always room for a rebound: Prices in Vancouver and Victoria were both up 2.8% in July, following a cooling period after the British Columbia government introduced a tax on foreign buyers last August. The indexes for Hamilton, Ottawa-Gatineau, and Montreal reached all-time highs.
Can’t afford to buy a home? Take some of the heat off avocado toast and blame it on your friends. A new Zillow report finds millennials who attend nine destination bachelor/bachelorette parties over their lifetime will fork over US$13,788 ($17,270 Canadian) — and that doesn’t take into account all the costs of attending the actual wedding. That might be a tiny drop in the down payment bucket depending on where you live (Toronto, Vancouver), but it’s still a significant chunk of change for 20-somethings juggling entry-level salaries, student debt, and high costs of living. To see how much house you can afford, use our mortgage affordability calculator.
As high house prices make news across the country, Canadians are continuing to pile on debt. A new TransUnion report says not only are more Canadians borrowing, they owe more than ever before on their mortgages — the average mortgage had $198,781 left on it at the end of June, up 5% year-over-year. The good news is that delinquency rates dropped, for the third quarter in a row, to 0.56%.
As usual, consumer debt figures are the most troubling. The report found more people are taking on short-term, high-interest installment loans with an average balance of $20,466 and a 4% delinquency rate — the highest of any type of debt. Overall, the average Canadian owed $22,154 in non-mortgage debt at the end of June, up 2.7% year-over-year.
Just kidding — it’s “material change,” which is defined as “a substantial and continuing change to your situation that affects and increases the risk involved to insure your property.” Renovations or home additions, installing a pool, starting a home daycare, or renting out a spare room are all material changes, and you risk voiding your coverage if you don’t inform your insurer about them immediately. Unfortunately for homeowners, as this article notes, the bar for what constitutes a material change is “decidedly low.” For clarity, ask your insurer about what changes you’re expected to report. When in doubt, report early and report often.
On Aug. 25, Ratehub.ca was announced as the Ontario regional winner of the Startup Canada High-Growth Entrepreneurship Award. Over the last two years, the company has more than doubled our staff count as we launched new verticals such as credit card, GICs, savings, and chequing accounts comparisons. The Startup Canada Awards recognizes individuals, communities, and institutions that have demonstrated innovation, excellence, outstanding achievement, and impact in advancing Canadian entrepreneurship. The national winners will be announced on Oct. 19.