RateHub Roundup: November 2016

by Jordan Lavin November 7, 2016 / No Comments

October was full of stories, especially when it came to mortgages. New rules came into effect this month that will directly affect your ability to get a mortgage, and the mortgage rate you’ll pay (in some cases, even if you already have one). These announcements took the spotlight, but they’re not the only things that happened this month. Here’s our roundup of the stories you might have missed:

Regulators regulate like they’ve never regulated before

The federal government and its agencies are acting like there’s a juicy bonus on the line for who can have the biggest impact on mortgages and real estate in Canada. The government dropped the hammer on mortgage lending this month, making sweeping changes to the rules surrounding who’s responsible if a borrower defaults. The festivities started with the federal government announcing new rules for mortgages that will make it harder to qualify for a mortgage, with the lasting impact being higher mortgage rates. The Bank of Canada held its key interest rate steady, the CMHC issued a “red warning” over risks in the housing market, and Ottawa proposed more new mortgage rules that will also lead to higher mortgages rates. And there’s likely more to come.

A third of payments are now contactless

One of the biggest providers of point-of-sales machines says contactless payments made up about 33% of the transactions it processed in the third quarter of 2016, up 13% from the same quarter last year. The contactless payments include those made using credit cards, and those made from smartphones using technologies like Apple Pay. Contactless payments are quicker and easier than the chip-and-pin option, and seem to be gaining steam. I hate waiting in lines at coffee shops so the sooner contactless gets up to 100% of transactions, the better.

Sixty years of RRSPs

Canada’s second-favourite tax shelter (behind the principal residence exemption that lets you sell your house tax-free), is set to turn 60 next year. According to RateHub’s 2015 Digital Money Trends report, 75% of Canadians are actively saving for retirement but only 48% are confident they’ll have enough funds for retirement. If you’re wondering about how to kickstart your retirement savings, you’ll find great information all month long on our blog for Financial Literacy Month.

Another reminder to check your insurance coverage

The difference of 12 hours has cost an Ontario man almost $2-million in insurance payout. Adam Bari was riding his motorcycle when he was involved in an accident near Hamilton, Ontario on June 1st, the day new insurance rules came into effect in the province. Despite the fact he was initially (mistakenly) pronounced dead, his injuries are not considered catastrophic under the new rules. Had his crash been the day before, they would have been. So why would the government take away coverage from someone who almost died? The change was part of an effort by the provincial government to reduce insurance costs – the target was to reduce rates by 15%. But the effort to reduce rates, like the associated coverage, has been ineffective. Car insurance rates actually rose by 1.5% in the third quarter of 2016.

RateHub Updates

RateHub CEO Alyssa Furtado stood before the dragons on Dragons’ Den during the season premiere on October 5th. No spoilers here. You can watch the video on the Dragons’ Den website.

The new mortgage rules mean you now need more income to afford the same house. How much more? Learn how the math works where you live with our new infographic, The Income Effect.

Confused about savings accounts? Getting the best rate is usually the goal when selecting an account, but not always. Check out our new tool that asks you simple questions to help you pick the right account for you.

And if you’re interested in personal finance, be sure to join us at the Canadian Personal Finance Conference. The conference is November 19th and 20th in Toronto and features keynotes from Preet Banerjee and Bruce Sellery. Get tickets here.

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