From mortgage math to medical marijuana grow-ops, February finance news was equal parts informative and bizarre — we definitely have a lot to think about. Capping off the month was the Bank of Canada’s interest rate announcement, with the central bank holding steady its benchmark interest rate at 0.5%. Here’s a roundup of other stories you might have missed this past month:
Here’s some free career advice: don’t steal from your employer by smuggling things up your butt. A former Royal Canadian Mint employee was sentenced to 30 months in jail and must pay a $190,000 fine after being convicted of stealing 22 gold “pucks” and laundering 17 of them through gold buyers in Ottawa. The CBC reports Leston Lawrence made $130,000 from his stolen wares, using the money to, among other things, buy a boat in Florida and have a home built in Jamaica. While Lawrence’s defense lawyer told reporters the mint’s lax security measures made it easy for his client to steal, a mint spokesperson told the CBC they’ve since made “several improvements” to their security checkpoints and how they screen employees. If Lawrence doesn’t pay the fine within three years of being released from prison, he’ll have to serve an additional 30 months.
When it comes to mortgages, length matters. While Mortgage Professionals Canada says most people opt for a five-year mortgage, James Laird, RateHub co-founder and president of CanWise Financial, says the average Canadian will only have their mortgage for 3.8 years. So while you might be focusing on weighing the pros and cons of a fixed-rate vs. variable-rate mortgage, take time to think about where you might be in the next 10 or 20 years: marriage, children, or perhaps a new job? As Laird notes, it’ll cost you more to break a fixed-rate loan than it will to terminate one with a variable rate.
Millennials are hungry for homeownership, but a new global survey finds they’re woefully financially underprepared to meet their goals. Commissioned by HSBC bank, the survey of 9,000 adults, including 1,000 Canadians, found that 37% of millennials (individuals age 18-35) said they had made a withdrawal from the “bank of mom and dad” to cover housing costs. And although 82% of Canadian millennials surveyed said they’re planning to buy a home in the next five years, 73% of individuals within that group said they haven’t started saving for a down payment. The survey’s results are in line with RateHub’s 2016 Digital Money Trends report — our infographic, broken down by geographical region, shows the percentage of Canadians getting help from relatives to break into the country’s hot housing market.
A Toronto couple is living every homeowner’s nightmare: an unliveable house with $2 million in damage. As reported by the Toronto Star, Hassan Hojjatian and Mitra Kermani’s basement, basement bathroom, foundation, and garage roof were damaged by a heavy rainstorm in 2011. Their insurance company denied their claim, saying water bled through their home’s foundation walls and that this type of “ground water” or “surface water” damage wasn’t covered under their policy. In turn, the couple sued to recoup their losses. A judge sided with the insurance company, agreeing with a panel of experts that the subpar grading of the land around the couple’s home was to blame for the water seeping into the foundation.
As one insurance broker told the Star, this painful situation is a reminder that “an insurance policy is not meant to respond to water damage caused by maintenance issues that have been unaddressed or ignored.” In general, insurance companies will cover flooding resulting from sudden or unexpected bursting of pipes, water main leaks, and even overflowing bathtubs. However, overland flooding, seepage, and sewer backups must be purchased as additional protection (called an endorsement).
Even if you’re licensed to grow medical marijuana, don’t expect to get home insurance coverage. CBC news reports that a Kamloops, B.C., landlord found this out the hard way when his home insurance policy was cancelled when after he discovered his tenant was growing dozens of medical marijuana plants without his knowledge. And while the Insurance Bureau of Canada told the CBC growing weed is an uninsurable “high-risk activity,” landlords essentially have no recourse if they get wind of their tenant’s green thumb. In a statement to CBC’s Go Public, the landlord’s insurance company said that regardless of legality, marijuana grow operations present “inherent insurance risks,” including “a greater likelihood of water damage, mould, fire, vandalism and burglary.” Even after shelling out $5,000 in costs for air and soil testing, plumbing and electrical inspections, and mould checks, the landlord still can’t get insurance coverage for his property.
RateHub launched our chequing accounts comparison tool this month, making it easier than ever to find the best account for your banking needs.
Running underneath what might be the coolest headline ever, RateHub CEO and co-founder Alyssa Furtado is profiled in Smith magazine alongside fellow Queen’s University graduates James Laird of CanWise Financial, Lauren Haw of Zoocasa, and RateHub chief marketing officer Kerri-Lynn McAllister.