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Ratehub logo Roundup: January 2016

When it comes to personal finance, the new year opens up new possibilities and presents new challenges. For Canadians in 2016, challenges will include new mortgage rules, new TFSA rules, and an underperforming economy. There’s also the possibility that mortgage rates will go up, making it more important than ever to compare mortgage rates to find the best deal. There’s no turning back, so here are a few of the stories that will have the biggest impact on your finances in the coming year.

New down payment rules start Feb. 15

Regular readers of this blog will already know that Ottawa is changing the rules about how much money you need to put down when buying a home. If this is news to you, here’s the short version: starting Feb. 15, you can still buy a home under $500,000 with a down payment of just 5%. But if you’re spending between $500,000 and $999,999, you’ll need to put down 10% on the portion over half a million. For example, the new minimum down payment on an $800,000 home will be $55,000 ($500,000 x 5% = $25,000 + $300,000 x 10% = $30,000). If you’re putting down less than 20%, you’re still going to need to have CMHC insurance. And if the price tag is $1 million or more, you’ll still need at least 20% down.

Will you use cash in 2016?

An online survey showed 65% rarely use cash anymore, with most Canadians favouring debit and credit cards for their everyday purchases. And depending where you live, it’s becoming less and less necessary to carry your cards with you anymore. Between mobile wallets, Uber, and apps that let you pay for lunch with your phone, it’s becoming easier and easier to leave your wallet at home. It’s not perfect yet though. You’ll need an American Express-issued card to use Apple Pay (no Visa or MasterCard yet), you can’t use your mobile wallet for purchases over $100, and you’re still limited to that one massive chain if you want to buy coffee with your phone. We’re on the right track though, and soon enough the only jingle in your pockets will be your keys – until they’re merged into your phone, too.

Your new TFSA contribution limit is $5,500

If you’re one of the few who have maxed out your tax-free savings account, you now have room to pop in an additional $5,500. That’s down from last year’s limit of $10,000, as new policies put in place by the ousted Conservative government have been repealed. If you didn’t max out your TFSA last year, you’re in luck. The $10,000 limit from 2015 carries forward. If you were 18 years old when TFSAs were introduced in 2009 (that’s a birth year of 1991 or earlier), your lifetime limit has now increased to $46,500.

How likely is your car to be stolen?

The Insurance Bureau of Canada released its list of most stolen vehicles in Canada, and nine of the top 10 are Ford trucks. High-end, late model vehicles made up a majority of the other cars most likely to be driven away without permission. It’s estimated the related insurance payouts, police expenses and court costs add up to $1 billion every year, and the prevalence of car theft contributes significantly to the cost of insurance. You can save money on auto insurance by choosing a car that’s less likely to be stolen, maintaining a clean driving record, and investing in anti-theft measures like an immobilizer or vehicle tracking system. And don’t forget to set a reminder to compare car insurance quotes a few weeks before your renewal to see if you can get a better deal.

Team Updates

Our founder Alyssa made another appearance on Global Toronto’s The Morning Show last month, talking about deals to be had south of the border and the best credit cards to use for cross-border shopping. Click here to watch the video.

The holidays may be over, but you should still check out our latest infographic, The Best Credit Cards for Holiday Shopping, because you can still give gifts, go shopping, and travel anytime.

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