Lock in now or stay variable
Mortgage rates in Canada are at historical lows, ranging from just over 2% for a variable closed 3 year rate to nearly 5.5% for a fixed closed 5 year rate (with 25 year amortization). It really pays to shop around as there is a wide variation between lenders and between terms.
Sometimes the cheapest rate is not always the best mortgage. You need to read the fine print and learn about the various options that are available to you. Can you double up your payments? Can you make a one-time large payment? What happens if you miss a payment? These are important questions as the answers can save you literally thousands of dollars over time.
How mortgage rates are determined
In Canada the mortgage rate that you are offered by your bank, credit union or other lender is determined by the Bank of Canada’s overnight lending rate. This is the rate at which banks will lend other banks money. From this rate your bank will determine what their Prime Rate will be. This Prime Rate is the overnight rate plus a certain percentage for profit. This Prime Rate is used to determine the variable rate mortgages that the lender will offer to retail clients (you and me).
Depending upon your credit history and the terms of your mortgage (number of years, variable or fixed rates, amount of loan, etc) your mortgage rate will be the Prime Rate plus or minus a percentage. This percentage is the lender’s profit margin and the amount required to take on the risk of you not paying the loan back.
Fixed mortgage rates are based more on the bond market. As such fixed mortgage rates rely on supply and demand issues in the market. In times of economic trouble most investors flee the stock market and look for the safety of government backed bonds. This lowers the yield that new issues of bonds pay (since more people want them they will still sell even with lower interest rates). When bond yields are low then mortgage rates head lower – minus the mark-up that your lender retains. The opposite is true as well. When the prevailing sentiment in the market is bullish (positive) then bond yields have to rise to attract investors (versus the stock market). When bond yields rise so to do mortgage rates.
The future
While no one can tell you with certainty where interest rates are headed it must be pointed out that the overnight rate is at one of the lowest points in Canadian history. The stock market has had a huge bull run since the financial crisis (which Canada weathered better than most nations). This would lead one to believe that mortgage rates are on the rise. To a certain extent Canada takes its cue from its largest trading partner to the South of us, and they are expected to keep rates low due to the housing crisis in the USA.
You would be wise to talk to your mortgage professional and get their take on where interest rates are headed. By switching from a very cheap variable rate to a slightly more expensive locked in rate you may in the long run make a huge savings as rates rise. Alternatively if you feel that rates will remain low for the rest of the year, you can hold off locking in until the fall. Whatever you decide be sure to read the fine print because the best mortgage is not just about the cheapest rate
This post was written by guest author Robin Williams. Enjoy.
Advantages of non profit debt consolidation companies.
Getting rid of high accumulated debts has been one of the most difficult tasks in recent times. The rate of interest for late payments has added to the woes of consumers. Moreover taking the help of a debt consolidation organization is not feasible due to their high fees. A good alternative, in this case, will be taking the help of a non profit debt consolidation company.
What is a non profit debt consolidation company?
A non profit debt consolidation company is an organization that does not distribute its surplus funds among its owners, but uses them to achieve their goals. A non profit company runs with the donations they get from debtors, credit organizations and consumers. The main advantage to opt for a non profit company is that you don’t have to pay the high fees that you generally pay to general debt consolidation organizations.
How do they work?
These non profit companies have the same function and duties that general debt consolidation organizations do like –
* They’ll analyze your monthly income and expenses.
* They’ll prepare a list of all your creditors and the amount you owe to each of them.
* They’ll evaluate all your debts and and give you a clear picture on how much money you can save by consolidating your debts.
* They’ll negotiate with the creditors to decrease or waive off the over-the-limit charges on your credit card accounts.
* They’ll take the calls from your creditors as well as make monthly payments to your creditors.
* They’ll also give you advice how to better manage your money in the future.
* They can also convince your creditors to issue a positive credit report as long as they are receiving payments.
What are the advantages?
You’ll get a lot of advantages if you opt for a non profit debt consolidation company like –
* Decreased outstanding amounts.
* Low interest rates.
* One-time monthly payment.
* No collection calls.
* Full control on your debt.
* And lastly, lesser fees than from the general debt consolidation companies.
Before opting for a non profit debt consolidation organization, check it out online from the Better Business Bureau. Choose wisely and then see your dreams of financial freedom becoming a reality.
When I was young we used to used to make long distance telephone calls to family and friends just like anybody else. Only we used to wait to make those calls on Sundays or very late at night because it was cheaper during those times.
Nowadays there are lots of different options for cheap long distance telephone rates. Bell and Telus and Rogers offer lots of plans and options, and when combined with their ‘bundles’ can save you lots of money. Of course that is “save” you lots of money compared to unbundled or to their regular rates. And when you receive your monthly bill it really looks good. They list all your long distance calls, who you called, when and how long and conveniently tell you how much you saved. Some of these savings are quite significant, like 80% or even 90% which is really great.
Keep in mind that these large savings rates are off of their regular prices – which if you pay those prices you are really getting royally screwed. I mean they really make you bend over. Please don’t let them do this to you. Even their supposedly great posted savings rates are a rip off, compared to the options that are currently available.
Bell has a 500 minute plan per month for $4.95 (with bundle) $9.95 without the bundle. Bundle means Long Distance Plus at least one of Internet, Wireless or TV. Also, there is a Network charge of $5.95 per month and additional minutes are 7 cents each. So for 500 minutes you pay $15.90 per month or more if you have a bundle. I know it seems like you should be saving by getting a bundle, but actually you have to pay more for the internet or wireless or TV services.
Bell also has a plan for 1000 minutes for Canada/USA for $7.95 or $12.95 (no bundle) plus network fees of $5.95 per month and 7 cents per minute thereafter. This adds up to $18.90 per month. You can get unlimited long distance calling in Canada and USA from Bell for $22.95 or $27.95 (no bundle) plus network fees and 10 cents after 45000 minutes. Admittedly this is a lot of minutes.
However if you don’t make a lot of long distance calls each month it really pays for you to avail yourself of a cheap long distance plan. We typically make less than 250 minutes on long distance each month. For that I pay less than $7.50. I call whenever the mood strikes for as long as I like (I don’t even think about the costs because it is so cheap) and my wife often calls her sister in Hong Kong and still the bills are under $10 per month.
I use RapidTel and pay only 2.9 cents minute. At this rate you can make approximately 450 minutes of calls before signing up for one of their ‘unlimited’ plans would save you money. What I like best about RapidTel is that I don’t have to dial any access numbers – in fact I don’t have to change my calling habits at all. Just dial 1 + area code + number and away I go. I have tied my account to my VISA card so each month I get a bill via email (PDF file) that looks just like my old Bell bill except that it is much much less expensive, plus I get points on my Visa card.
If you make a lot (more than 450 minutes) of long distance calls you can look at their unlimited plans and save even more. Unlimited Canada is $12.95/month. Unlimited Canada & USA is $18.95/month. Their unlimited plans are truly unlimited for those you who like to call more than 45,000 minutes a month this is much much better than Bell.
They even have a plan for getting rid of the $30+ per month charge for a home phone. With a VOIP (Voice Over Internet Protocol) plan you can have local access (just like your regular Bell home phone plan) that is $16.95 per month for a basic line that includes voice-mail, call display, etc, etc. However, a fax machine will not work with VOIP because some small bits of data are occasionally lost and this disrupts a fax, whereas it is not that noticeable with regular voice traffic. Also, heavy bandwidth usage (like downloading a movie) while on the phone will degrade your phone call. Long Distance is extra, but still only 2.9 cents per minute. They also have ideas for long distance from you cell phone that are worth checking out.
Believe it or not it is possible to get even cheaper than RapidTel, so long as you live in a major urban area and don’t mind dialing an access number first, you can pay as little as one cent per minute. Here is the link to one such company. There are quite a few choices out there but I am really pleased with RapidTel. I’ve never had a mistake on my phone bill and when ever I call customer service (rarely) I get a human in Toronto right away, no complaints. Oh and no I don’t get any kickbacks from RapidTel so you know I must really like the service.
Take a look at last year’s property tax bill. I know what you’re thinking. What the heck does that have to do with a free brunch? Just bare with me for a few moments and all will become clear.
If you live in Canada your property tax bill will average somewhere between $2,000 and $4,000 depending on which province you live in. Ontario and Quebec are the most expensive, Newfoundland and Labrador the least expensive on average. Property values are much higher in British Columbia but rates are lower so the tax man sticks it to central Canada the worst.
Let’s say your property tax bill is $3000 per year. Eggs and bacon with hash-browns and a side of toast is coming, just be patient. If you divide that amount into 12 monthly payments ($250 per month) you can make the overall payment easier to handle (rather than having to come up with $3 Grand all at once) and also earn a free brunch.
How you ask? Simple. Open up a high interest savings account and make your monthly deposits of $250. At an interest rate of 2% compounded daily you will earn an extra $32 and still pay the municipal tax bill at the end of the tax year. $32 will buy a lot of eggs and bacon at Denny’s. If you are in the States Ally still has the best rates (as rated by money-rates.com).
The key of course is capital preservation, so you absolutely cannot invest in something that might drop in value. Remember the old saying about death and taxes – it’s the only two things you HAVE to do! Clearly equities are out. A few years ago I would have recommended a good money market fund, but after last year and trouble brewing for the US currency I’m no longer sure about these funds. Cash is king.
Now imagine what other yearly bills you have to pay? Water and sewage perhaps? Again, just divide the total amount by 12 monthly payments and deposit that into the high interest savings account and pocket the interest. Can you say pancakes at IHOP? Yummy!
I’ve been getting more calls for information on chequing accounts and ways to save money on everyday bank fees. For the type of banking that I do I really need unlimited transactions per month. We use our debit card frequently to make purchases of all kinds rather than carry a lot of cash, and take advantage of the ‘cash back’ feature that is available at many stores these days when we do need cash.
Of course, we still sometimes go to the bank machine (ATM) to make deposits and rarely to the branch for international money transfers or US dollar deposits. But the most frequent type of transaction on our bank account is through internet banking – namely setting up bill payments. On average we make something like 50-60 transactions per month, of which about 20 are automatic bill payments, the rest being debit card transactions and a few other miscellaneous items.
So I compared the five major banks and their chequing accounts with several other banks, trusts and virtual banks to see how they measure up against each other. There was a wide variety of options and it I was not always able to compare apples to apples, so I have included the links to each institution and their detailed information.
TDCanada Trust:
* The “Infinity” account for $12.95/month. This gets you unlimited transactions but you have to pay for cheques. If you keep a balance of $3000/month the fee is waived.
* The “Value Plus” plan for $8.95/month for 25 transactions. Waived if you maintain $2000 balance.
Scotiabank:
* “One” account for $9.95/month for unlimited transactions which is waived if you maintain $3500 in the account.
* “Basic Banking” for $7/month for 30 self-serve transactions. Waived if you maintain $2500 in the account.
BMO Financial Group:
* “Premium Plan” for $25/month for unlimited transactions, free cheques and traveler’s cheques and up to 10 non-BMO ATM transactions. Fee is waived if you maintain $5000 balance.
* “Performance Plan” for $13.95/month for unlimited transactions, but pay for cheques and non-BMO ATM transactions. Fee is waived if you maintain $3000 balance.
* I found that this was by far the most difficult website to navigate and it really through me off BMO.
CIBC:
* “Unlimited” for $12.95/month for unlimited transactions with free cheques.
* “Everyday Chequing” for $3.90/month for 10 transactions (then 65 cents thereafter) fee is waived if you maintain $1000 balance, but still have to pay if more than 10 transactions.
RBC Financial Group:
* “Day to Day” for $4/month for 15 transactions.
* “No Limit” for $10.95/month for unlimited transactions but you pay for cheques.
* “Signature No Limit” for $13.95/month for unlimited transactions and free chequing.
HSBC:
* “Performance Unlimited” for $11.95/month waived if you maintain $4000 balance.
* “Performance Limited” for $4/month for 10 transactions.
* With both accounts able to use HSBC/Exchange/BMO ATM machines.
National Bank:
* “e-Account Direct Access” for $5.50/month for 20 e-transactions. Waived if you maintain $2500 balance. Extra fees for in-branch transactions.
* “e-Account Access Plus” for $12.25/month unlimited e-transactions. Extra fees for in-branch activity.
* “Virtuoso Package” for $20.95/month unlimited transactions. Waived with a balance of $5000
VanCity Credit Union:
* “e-Account” for $7/month unlimited online and debit transactions, free cheques. Waived if you maintain $1000 balance. In branch transactions cost 70 cents after the first per month.
* “Basic Package” for $4/month for 12 transactions (waived if you have a balance of $1000) then 50-70 cents thereafter depending upon the transaction. Pay for cheques.
* “Package Account” for $10/month for 40 transactions (50-70 cents per thereafter) free cheques and travelers cheques.
Desjardins:
* “Premier Plan” for $13.95/month for unlimited transactions (waived if maintain $4000 balance) 3 free interac charges.
* “Premier Plus” for $20.95/month for unlimited transactions (waived if maintain $5000 balance) free 100 cheques per year, travelers cheques, money orders and a discount on safety deposit boxes.
ING Direct:
* Savings accounts only. Currently at 1.2% interest, no minimum balances and no fees to have the account. CDIC protected up to $100,000. Still need another bank account for everyday banking activities.
Ally:
* Savings accounts only. Currently at 2% interest, no minimum balance, no fees. CDIC protected up to $100,000. Still need another bank account for everyday banking activities. Not available in Quebec. Part of ResMor Trust Company.
Presidents Choice Financial:
* This is a regular day to day chequing account. NO FEES. No minimum balance. Free cheques, free bill payments, free debit payments. Can earn PC points which are redeemable for groceries and gas. Over 3700 ATM machines (PC and CIBC) nationwide. Not available in Quebec.
One other thing to note is that only Desjardins and PC Financial paid you interest on your chequing account (Desjardins paid 0.05% on balances over $1000. PC paid you anywhere from 0.05% to 0.5% depending upon your balance). While the amount of interest earned was not very much something is still better than nothing in my book, and much better than the major banks (and even credit unions) which were all zero%.
Another thing that most of the institutions where pushing was waiving the fee if you maintained a certain minimum balance in your account for the month. Of course if you fall below even for one second of the month you have to pay the fee. Also, while I think it is a good idea to maintain a certain minimum balance in your account for emergencies (like $1000 or $1500 whatever you are comfortable with); I feel that the balances that most of these banks require are much too exorbitant. I suggest that you can use that large balance in a much better way to earn more interest and dividend income through investing rather than having it save you some monthly fees.
I think it is fairly clear to see that PC Financial is the clear winner out of this group. As I am currently with another institution on this list I will be making the change as quickly as I can so I can start saving. I’ll let you all know how easy or difficult it is to switch. PC has the added bonus for us that we also do our grocery shopping at Superstore or Loblaws. If you think that I’ve omitted your favourite bank or credit union please let me know which ones I should review and I’ll post that too.
So we finally bought a home gym for the basement. We already had a Stairmaster in our bedroom and thought we should have some resistance training equipment too. My wife and I spend quite a bit of time tethered to our computers so it was important to be able to get some exercise at home.
We ended up with the Bowflex Conquest home gym with all the attachments. It’s a Cadillac of a home gym. Normally Bowflex are quite expensive, but my wife is such a smart shopper, she bought it second hand and got it about a month after Christmas. This is just enough time for people to realize that this big new gift is not something that they want after all. Then she under bid and waited. We used Kijiji (which is a division of EBay) for our online second hand purchase and it worked great. I did have a short drive to pick it up and had to pay cash, but brand new these things are well over $1,000 (actually they are discontinued so can only purchase new from a sports store that still has one in stock or online) and you can see them listed on Amazon for around $700 US. We paid $500 CAD.
I brought it home and discovered that this sucker is big – too big for the bedroom, so downstairs it went. 8’4” long and 6’6” wide when in use, also nearly 7’ high. We have a low ceiling in the basement (about 7 feet) but it did just barely fit. Assembly was complete in 20 minutes. Now all we have to do is watch the DVDs to see all the different exercises that we can do (assuming we have the will power. Yes damn it I can do it).
We are definitely saving money on a gym membership and gas to and from the gym. Also, since it’s downstairs I am assuming that we will actually use it more frequently and already my wife has challenged me to a three week routine, that I’m determined to complete. We both used to work out quite regularly but that was before we had kids and had all kinds of time (although we didn’t know it at the time), now however it has been several years between work outs for me, so I’ll have to start slow. Better slow than stopped. Ok I’m off to find my running shoes for a workout, wish me luck.