• TSX +150.17
• DOW +122.06 .
• Dollar +.01c to 97.04cUS closed higher for a 6th straight sessions
• Oil +$1.29 to $81.50US per barrel.
• Gold +$2.20 to $1,134.80 USD per ounce
Regular reviews of your mortgage ensure your loan is still right for your financial situation
by Malcolm Morrison, THE CANADIAN PRESS
TORONTO - Buying a home is probably the most expensive purchase you will ever make and if you're like the vast majority of Canadians, you used a lot of borrowed money to experience the joys of home ownership.
Because you have to pay interest on a loan over years and decades, that means you will end up paying a lot more money for your house or condo than what you paid the seller.
You have to take advantage of every break to reduce your mortgage balance and the amount of time it will take to pay off your home. And that means it's a good idea to take a good hard look at that loan at least once a year.
"There's a lot of things that people don't actually think about," said Jim Rawson, regional manager for mortgage broker Invis in Toronto. For starters, he thinks it is a good idea to keep a mortgage table handy just to remind you how much you're actually paying for that house.
"And you should take a look at it every year and take a look at where you are on it and how much you paid down," he said.
One of the most obvious things you can do - and will shave years off your mortgage term - is make sure you are not paying in monthly installments."You can switch to weekly or bi-weekly and generally most institutions will allow you to do that." Doing so amounts to an extra monthly payment every year. Also, most mortgages are built with an annual pre-payment feature.
"And if you can make a portion of that, any portion of it, you're obviously going to be saving some interest," said Rawson.
Many institutions will allow you to pre-pay at least 15 per cent of your principal balance every year. (MERIX allows 20%)
You may not be able to come up with a huge amount of money every year. But even nibbling away at the balance can carve years off the payment term.
"Ten dollars (a week) is not going to make a huge difference (to you) - but $10 a payment can make a difference," said Rawson.
"And you know a lot of people are getting raises every year, or every couple of years and if they were to apply even a portion of their raise to their mortgage, they would be saving a lot of money over the course of their mortgage."
You may also be thinking of embarking on a major renovation for your kitchen or bathroom or slapping on a new roof.
Many would go the home equity loan route but instead, you could just add the cost to your mortgage for a lower interest rate.
"Absolutely, if you have enough equity built in to your home right now and you're looking at a major renovation, certainly refinancing and adding, increasing your mortgage amount can certainly be a very cost-effective way of borrowing for that renovation," said Charles Lambert, Managing Director, Mortgages, at Bank of Nova Scotia.
"You look at it in terms of relative size of the renovation that you want to do - I'm not sure you want to (do this) if you're repainting your house or something like that."
Instead, he said, a line of credit could be the appropriate way to do a smaller project. And here again, you can use your home as security for a line of credit.
"You can borrow up to 80 per cent of the value of your home," said Lambert.
Secured lines of credit generally charge a point or two above the prime rate.
You could also think about consolidating debt like a credit card balance to a lower rate by tacking it onto your mortgage. But don't use it as an excuse to rack up more debt.
"One of the key things that I always advise clients about is if they're going to pay off credit cards by refinancing your mortgage, you better be cutting up those credit cards," said Rawson.
"It doesn't mean you can spend some more money because that's not going to help at all."
Finally, mortgage interest rates are at extremely low levels now - but they won't stay that way and economists expect the Bank of Canada to start hiking rates later this year.
So for peace of mind, homeowners on a variable rate might want to opt for something fixed right about now.
"If you're looking for long-term stability, then you're probably taking a look at trying to do something fixed for five years or so," said Rawson.
But, historically, rates fluctuate and at some time in the future, you may find that it makes sense to break your mortgage so you can take advantage of a lower rate, despite a high penalty.
For example, Scotiabank would charge you the greater of three months' interest on the mortgage balance or the interest rate differential.
"Sit down with a mortgage pro, they can work out for you whether it makes sense or not," added Rawson, adding if you can save yourself two percentage points over the next five years, you're way ahead.
http://ca.finance.yahoo.com/personal-finance/article/cpmoney/regular-reviews-your-mortgage-ensure-your-loan-still-right-your-financial-situation-20100225
Monday, March 8, 2010
Friday, March 5, 2010
Financial Update For March 5, 2010
Budget 2010: A second year of stimulus spending Canadians receive assurance of no tax increases compared to Greece who is facing an increase to their “GST” to 21% .
The day the retail world stood still
• TSX -27.88
• DOW +47.38 .
• Dollar +.13c to 97.03cUS closed higher for a 5th straight sessions showing little reaction to the release of the federal government's 2010-11 budget.
• Oil -$.66 to $80.21US per barrel.
• Gold -$10.10 to $1,132.60 USD per ounce
Canadian gold-medal wins spurred retail spending
No wonder spending was down last Sunday as 26million Canadians watched Canada win GOLD in men’s hockey
VANCOUVER (Reuters) - Canadian gold medals in the Vancouver translated into brisk business for merchants in the Olympic host city, except when consumers were too busy watching hockey, according to data released on Thursday.
Retail spending in Vancouver more than doubled the day skier Alexandre Bilodeau won Canada's first gold of the Games and jumped again when Tessa Virtue and Scott Moir won ice dancing, said credit card processor Moneris Solutions.
Spending in Vancouver and Whistler on items ranging from clothing to beer was 48 percent higher during the February 12 to 28 competition than it was the same period a year earlier, according to Canada's largest card transaction processor.
An exception came on the final Sunday when Canada's men's ice hockey team was on the ice winning gold against the United States. Sales dropped 41 percent compared with the same time slot in the five days leading up to it, the company said.
Canadians accounted for about 78 percent of the Olympic-spurred transactions during the Games, with the rest coming from international visitors to Vancouver and Whistler.
Chinese spent the most per transaction for the foreign visitors, with an average bill of C$423, while Russians were second with C$236. Russia will host the next Winter Olympics in Sochi.
Visa Inc, which has a sponsorship deal with Olympics organizers, estimated that its international card holders spent US$115.3 million in the host province of British Columbia during the 17 day event.
http://ca.news.finance.yahoo.com/s/04032010/6/finance-canadian-gold-medal-wins-spurred-retail-spending.html
Budget 2010: A second year of stimulus spending
Paul Vieira, Financial Post
OTTAWA -- The Conservative government sketched out on Thursday its initial plans to return to budget balance, by targeting cuts in the public service, a freeze on foreign aid, limited growth in military spending and higher EI premiums.
The spending restraint, outlined in its 2010 budget, would net $17.6-billion in savings over five years and bring the deficit down from a high of $53.8-billion this fiscal year, ending March 31, to a low of $1.8-billion by 2015.
Before the cuts kick in, however, the Conservative government said it was committed to spend $19-billion as part of year two of the two-year $47-billion stimulus package aimed at resuscitating the economy after the global financial crisis.
The 451-page budget sets out how the Conservatives plan to meet all its goals -- of creating jobs and bolstering Canada's long-term competitiveness, while at the same time returning to surplus without tax increases, nor cuts to transfers to provinces and individuals. The government also said it would go through with cuts to corporate income taxes, from 19% to 15% by 2012, despite calls from opposition politicians to cancel them and use the money to help seniors and the poor.
"We are building Canada's reputation as an investment-friendly country," Finance Minister Jim Flaherty said in his budget speech. "A country committed to free and open trade, unburdened by massive debts and [the] higher taxes of our competitors."
All the opposition parties vowed to vote against the budget -- although Liberal Leader Michael Ignatieff said his party would not bring down the government and force an election by withholding the number of Liberal MPs who show up to vote.
Even though Canada's economy is recovering at a rather robust clip of late -- 5% growth was recorded in the final quarter of 2009 -- Mr. Flaherty said following through with more stimuli is the right thing to do as the global recovery is in its nascent stages.
Measures linked with the stimulus plan will expire as of March next year, and with it comes a plan to return to budget balance.
Overall, analysts said the budget struck a fair balance between adding momentum to the recovery from a deep recession, and preparing the economy for fiscal restraint.
"It is not a dramatic change of course, and in uncertain economic times you want a steady hand. And we are getting a steady hand," said Craig Wright, chief economist with Royal Bank of Canada.
For some, such as the NDP, there wasn't enough money to help the unemployed or the poor. Others said there wasn't enough on the spending-cut side.
"A plan to balance the budget should actually balance the budget and this doesn't do that," said Kevin Gaudet, federal director of the Canadian Taxpayers Federation. "Restraint delayed is restraint denied. Taxpayers have heard similar promises of restraint before. Canadians will believe it when they see it."
There were some new spending measures, although minor, such as extending a work-sharing program at a cost of over $100-million, and eliminating all tariffs on imported industrial inputs at cost of $1.2-billion over five years.
According to the government's plan, the $53.8-billion deficit will be cut in half in two years time, and by two-thirds in three years. Much of that will be due to allowing the stimulus plan, and its associated measures, expire in March 2011.
The government envisages robust growth in revenue, starting in the 2010-11 fiscal year, and will grow thereafter based on, among other things, four consecutive years of higher Employment Insurance premiums, which business leaders describe as a payroll tax.
Economists at Toronto-Dominion Bank have calculated that EI premiums will rise from the present $1.73 level to $2.33 by 2015, in an effort to return the EI account to balance. As a result, that will contribute nearly one quarter to the overall improvement to federal revenue over the next half decade, they said in a note.
On spending, the government will introduce legislation to freeze the salaries of all MPs and Senators for the next three fiscal years.
Also, Ottawa is eyeing $6.8-billion in savings through containing the operating costs of federal departments. Departments' operating budgets will be frozen in 2011 and 2012 at 2010 levels. Further, a 1.5% wage increase owed to unionized workers in 2010, at a cost of $300-million, has to be funded through cuts within departments.
The government also plans to cap growth in defence spending, which doubled to $20-billion in the previous decade. Restraint doesn't begin until 2012, and the efforts aim to achieve savings of $2.5-billion by 2015. Meanwhile, foreign aid will reach $5-billion this coming fiscal year, and increase no further, and be subject to review on a year-by-year basis.
Overall, after the stimulus package expires, program spending is set to increase at on an annual basis of between 1.5% and 2.5%. This could be quite the feat, as prior to the recession program spending grew at roughly 6% to 7% a year.
Douglas Porter, deputy chief economist at BMO Capital Markets, said the government's plan is banking on a well-entrenched U.S. and global economic recovery as of next year to smooth the way toward stimulus removal.
"The big question mark is whether the economy can withstand the abrupt removal of stimulus a year from now," he said. "To me, that's the real test."
The budget's underlying forecast envisages economic growth of 2.6% this year (below the Bank of Canada's forecast), 3.2% in 2011 and 3% in 2012.
At a media conference during a lockup for reporters, Mr. Flaherty said if the economic growth projections fell short, his government was prepared to "do more" in terms of spending restraint. http://www.financialpost.com/news-sectors/story.html?id=2636923
Budget Highlights
Projected deficit for current year (2009-10): $53.8-billion
• Deficit for 2010-11: $49.2-billion
• Total spending: $280.5-billion
• Program expenses: $249.2-billion (an increase of 4.7% over 2009-10)
• Debt charges: $31.3-billion
• Total infrastructure project spending: $7.7-billion
• Elderly benefits: $36.7-billion
• EI benefits: $22.6-billion (compared with $16.3-billion in 2008-09)
• Health and social transfers to provinces: $37.1-billion
• Transfers to municipalities: $2-billion
• Total federal debt: $566.7-billion
• Personal income tax to be collected: $117-billion
• Personal income tax cuts: $3.18-billion
• Corporate income tax to be collected: $22.3-billion
• Total excise duties and GST to be collected: $188.9-billion
• Savings from "containing administrative cost of government": $300-million
• Administrative savings, 2011-12: $900-million
• Savings from "closing tax loopholes": $355-million
• Total increase in funding for scientific research and post-secondary education: $1.88-billion
The day the retail world stood still
• TSX -27.88
• DOW +47.38 .
• Dollar +.13c to 97.03cUS closed higher for a 5th straight sessions showing little reaction to the release of the federal government's 2010-11 budget.
• Oil -$.66 to $80.21US per barrel.
• Gold -$10.10 to $1,132.60 USD per ounce
Canadian gold-medal wins spurred retail spending
No wonder spending was down last Sunday as 26million Canadians watched Canada win GOLD in men’s hockey
VANCOUVER (Reuters) - Canadian gold medals in the Vancouver translated into brisk business for merchants in the Olympic host city, except when consumers were too busy watching hockey, according to data released on Thursday.
Retail spending in Vancouver more than doubled the day skier Alexandre Bilodeau won Canada's first gold of the Games and jumped again when Tessa Virtue and Scott Moir won ice dancing, said credit card processor Moneris Solutions.
Spending in Vancouver and Whistler on items ranging from clothing to beer was 48 percent higher during the February 12 to 28 competition than it was the same period a year earlier, according to Canada's largest card transaction processor.
An exception came on the final Sunday when Canada's men's ice hockey team was on the ice winning gold against the United States. Sales dropped 41 percent compared with the same time slot in the five days leading up to it, the company said.
Canadians accounted for about 78 percent of the Olympic-spurred transactions during the Games, with the rest coming from international visitors to Vancouver and Whistler.
Chinese spent the most per transaction for the foreign visitors, with an average bill of C$423, while Russians were second with C$236. Russia will host the next Winter Olympics in Sochi.
Visa Inc, which has a sponsorship deal with Olympics organizers, estimated that its international card holders spent US$115.3 million in the host province of British Columbia during the 17 day event.
http://ca.news.finance.yahoo.com/s/04032010/6/finance-canadian-gold-medal-wins-spurred-retail-spending.html
Budget 2010: A second year of stimulus spending
Paul Vieira, Financial Post
OTTAWA -- The Conservative government sketched out on Thursday its initial plans to return to budget balance, by targeting cuts in the public service, a freeze on foreign aid, limited growth in military spending and higher EI premiums.
The spending restraint, outlined in its 2010 budget, would net $17.6-billion in savings over five years and bring the deficit down from a high of $53.8-billion this fiscal year, ending March 31, to a low of $1.8-billion by 2015.
Before the cuts kick in, however, the Conservative government said it was committed to spend $19-billion as part of year two of the two-year $47-billion stimulus package aimed at resuscitating the economy after the global financial crisis.
The 451-page budget sets out how the Conservatives plan to meet all its goals -- of creating jobs and bolstering Canada's long-term competitiveness, while at the same time returning to surplus without tax increases, nor cuts to transfers to provinces and individuals. The government also said it would go through with cuts to corporate income taxes, from 19% to 15% by 2012, despite calls from opposition politicians to cancel them and use the money to help seniors and the poor.
"We are building Canada's reputation as an investment-friendly country," Finance Minister Jim Flaherty said in his budget speech. "A country committed to free and open trade, unburdened by massive debts and [the] higher taxes of our competitors."
All the opposition parties vowed to vote against the budget -- although Liberal Leader Michael Ignatieff said his party would not bring down the government and force an election by withholding the number of Liberal MPs who show up to vote.
Even though Canada's economy is recovering at a rather robust clip of late -- 5% growth was recorded in the final quarter of 2009 -- Mr. Flaherty said following through with more stimuli is the right thing to do as the global recovery is in its nascent stages.
Measures linked with the stimulus plan will expire as of March next year, and with it comes a plan to return to budget balance.
Overall, analysts said the budget struck a fair balance between adding momentum to the recovery from a deep recession, and preparing the economy for fiscal restraint.
"It is not a dramatic change of course, and in uncertain economic times you want a steady hand. And we are getting a steady hand," said Craig Wright, chief economist with Royal Bank of Canada.
For some, such as the NDP, there wasn't enough money to help the unemployed or the poor. Others said there wasn't enough on the spending-cut side.
"A plan to balance the budget should actually balance the budget and this doesn't do that," said Kevin Gaudet, federal director of the Canadian Taxpayers Federation. "Restraint delayed is restraint denied. Taxpayers have heard similar promises of restraint before. Canadians will believe it when they see it."
There were some new spending measures, although minor, such as extending a work-sharing program at a cost of over $100-million, and eliminating all tariffs on imported industrial inputs at cost of $1.2-billion over five years.
According to the government's plan, the $53.8-billion deficit will be cut in half in two years time, and by two-thirds in three years. Much of that will be due to allowing the stimulus plan, and its associated measures, expire in March 2011.
The government envisages robust growth in revenue, starting in the 2010-11 fiscal year, and will grow thereafter based on, among other things, four consecutive years of higher Employment Insurance premiums, which business leaders describe as a payroll tax.
Economists at Toronto-Dominion Bank have calculated that EI premiums will rise from the present $1.73 level to $2.33 by 2015, in an effort to return the EI account to balance. As a result, that will contribute nearly one quarter to the overall improvement to federal revenue over the next half decade, they said in a note.
On spending, the government will introduce legislation to freeze the salaries of all MPs and Senators for the next three fiscal years.
Also, Ottawa is eyeing $6.8-billion in savings through containing the operating costs of federal departments. Departments' operating budgets will be frozen in 2011 and 2012 at 2010 levels. Further, a 1.5% wage increase owed to unionized workers in 2010, at a cost of $300-million, has to be funded through cuts within departments.
The government also plans to cap growth in defence spending, which doubled to $20-billion in the previous decade. Restraint doesn't begin until 2012, and the efforts aim to achieve savings of $2.5-billion by 2015. Meanwhile, foreign aid will reach $5-billion this coming fiscal year, and increase no further, and be subject to review on a year-by-year basis.
Overall, after the stimulus package expires, program spending is set to increase at on an annual basis of between 1.5% and 2.5%. This could be quite the feat, as prior to the recession program spending grew at roughly 6% to 7% a year.
Douglas Porter, deputy chief economist at BMO Capital Markets, said the government's plan is banking on a well-entrenched U.S. and global economic recovery as of next year to smooth the way toward stimulus removal.
"The big question mark is whether the economy can withstand the abrupt removal of stimulus a year from now," he said. "To me, that's the real test."
The budget's underlying forecast envisages economic growth of 2.6% this year (below the Bank of Canada's forecast), 3.2% in 2011 and 3% in 2012.
At a media conference during a lockup for reporters, Mr. Flaherty said if the economic growth projections fell short, his government was prepared to "do more" in terms of spending restraint. http://www.financialpost.com/news-sectors/story.html?id=2636923
Budget Highlights
Projected deficit for current year (2009-10): $53.8-billion
• Deficit for 2010-11: $49.2-billion
• Total spending: $280.5-billion
• Program expenses: $249.2-billion (an increase of 4.7% over 2009-10)
• Debt charges: $31.3-billion
• Total infrastructure project spending: $7.7-billion
• Elderly benefits: $36.7-billion
• EI benefits: $22.6-billion (compared with $16.3-billion in 2008-09)
• Health and social transfers to provinces: $37.1-billion
• Transfers to municipalities: $2-billion
• Total federal debt: $566.7-billion
• Personal income tax to be collected: $117-billion
• Personal income tax cuts: $3.18-billion
• Corporate income tax to be collected: $22.3-billion
• Total excise duties and GST to be collected: $188.9-billion
• Savings from "containing administrative cost of government": $300-million
• Administrative savings, 2011-12: $900-million
• Savings from "closing tax loopholes": $355-million
• Total increase in funding for scientific research and post-secondary education: $1.88-billion
Thursday, March 4, 2010
Financial Update For March 4, 2010
• TSX +24.54
• DOW -9.22 .
• Dollar +.42c to 96.90cUS The Canadian dollar shot up against the U.S. dollar for a fourth straight session as positive U.S. economic data, a spike in oil prices and debt-tackling steps by Greece boosted appetite for risk, stemming flows into the safe-haven greenback
• Oil +$1.19 to $80.87US per barrel.
• Gold +$5.90 to $1,103.30 USD per ounce
In contrast to the US who had 140 banks close in 2009, Canada had good news as more bank earnings rolled in. RBC earned a $1.5-billion profit, up 35 per cent from a year before, with provisions for credit losses reduced by 37 per cent, falling to $493 million.
Laurentian Bank of Canada said its profit was up 28 per cent from a year ago to $32 million
• DOW -9.22 .
• Dollar +.42c to 96.90cUS The Canadian dollar shot up against the U.S. dollar for a fourth straight session as positive U.S. economic data, a spike in oil prices and debt-tackling steps by Greece boosted appetite for risk, stemming flows into the safe-haven greenback
• Oil +$1.19 to $80.87US per barrel.
• Gold +$5.90 to $1,103.30 USD per ounce
In contrast to the US who had 140 banks close in 2009, Canada had good news as more bank earnings rolled in. RBC earned a $1.5-billion profit, up 35 per cent from a year before, with provisions for credit losses reduced by 37 per cent, falling to $493 million.
Laurentian Bank of Canada said its profit was up 28 per cent from a year ago to $32 million
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