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18 Jan

Canada Housing Market BMO’s 2.99% Mortgage No BOC Rate Change

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Flaherty keeping wary eye on housing market

 Finance Minister Jim Flaherty says he stands ready to intervene in the housing market again, just as a mortgage price war breaks out among Canada’s major banks.

 Flaherty said Tuesday that he’s watching the market closely, although he has no plans to tighten the market again at this point.

 His comments came on the same day that the Bank of Canada projected that the debt burden on households will continue to rise – a troubling sign that means stretched consumers are vulnerable to shocks in this climate of heightened economic uncertainty.

 Flaherty said he’s in close contact with the big banks, most of whom are now offering 2.99% fixed-rate mortgages – the lowest ever.

 Click here for the full Globe and Mail article.

 Is a 2.99% mortgage too good to be true?

 Bank of Montreal made headlines with the 2.99% five-year fixed-rate mortgage it unveiled last week.

Most of the other big banks have followed suit, but before signing on the dotted line you should read the fine print. These mortgages have restrictions that you won’t find on other products.

“It’s the lowest rate available but I would only recommend it to people who are very sure of their circumstances for the next five years,” said Kerri-Lynn McAllister of RateHub.ca, a website that compares mortgage rates. “You may want to look at a slightly higher rate that offers all the flexibility of a standard mortgage.”

BMO says this mortgage offers Canadians a way to be mortgage-free faster because it offers a great rate and a shorter amortization. But it differs from a typical mortgage in several ways.

 Click here for the full article in The Star.

 No BoC Rate Change for 16th Straight Month

 Canada’s key interest rate will begin 2012 exactly where it’s been since September 2010 – unchanged at 1.00%.

 This is the longest stretch on record (16 months) without a Bank of Canada rate change.

 Economists didn’t expect the BOC to move rates at this meeting. Instead, they were looking for any change of language in the Bank’s official statement. As usual, there were a handful of conspicuous statements in that release.

 Click here for BOC highlights from CanadianMortgageTrends.com.

 CIBC class action attracts hundreds of inquiries

 Lawyers spearheading twin class-action suits against CIBC over “vague prepayment terms” have fielded interest from hundreds of the bank’s mortgage clients – that as a case management judge in BC gets assigned to the legal action.

“There have been hundreds of inquiries about these cases to our office and that of our co-counsel in Ontario,” Kieran Bridge, a Vancouver lawyer with the Construction Law Group, told MortgageBrokerNews.ca, pointing to borrowers who paid out CIBC mortgages from April 2005 onward.

 FirstLine clients are among those concerned that they may have been adversely affected by the lender’s prepayment policy.

A Case Management Judge has also been assigned, what Bridge calls a key, mandatory step in moving class actions forward in British Columbia. “We applied in November for a judge to be appointed, in order to move the case ahead, and are pleased this has happened,” he said.

The twin lawsuits were filed in BC and Ontario last October, alleging some CIBC mortgage borrowers have been unfairly penalized by unclear prepayment terms giving rise to two substantive complaints.

 Click here to read more from MortgageBrokerNews.ca.

 We had a recession back in 2008-09, but you might not have known it by the way people kept spending and borrowing.

 Rob Carrick’s top 10 money tips

 Now, the economy is growing modestly, and yet a recent national poll has suggested that 70% of Canadians believe the country is in recession.

 This is progress. You’re much more likely to have your financial priorities straight if you’re worried right now about the future.

 Click here for 10 money rules to prepare you for any tough times ahead from the Globe and Mail.

 Canada ranks near bottom on Economist’s ‘Misery Index’

 Canadians rank relatively low on The Economist magazine’s Misery Index released this week, which is a good thing.

 Canada stands at number 70, out of 92 countries measured on a combination of unemployment and inflation.

 The jobless rate in Canada is now at 7.5%, high but nowhere near as high as other countries, while inflation is running at 2.9%.

 Macedonia, whose unemployment rate tops 30%, and Venezuela, where inflation is rampant, top the list.

 Click here to read more from the Globe and Mail.