Wednesday, October 14, 2009

Several Canadian banks raise mortgage rates

By: The Canadian Press

TORONTO — Several Canadian banks (TSX:BNS, TSX:CM, TSX:BMO) raised their posted rates for closed, fixed rate mortgages by up to 0.35 percentage points effective Wednesday.
Scotiabank, CIBC and the Bank of Montreal all raised their five-year closed rate by 0.35 percentage points.

Increases for other mortgages ranging from one year to 10 years ranged from no change to 0.35 percentage points.

The change follows a similar move by the Royal Bank to raise rates last week.

note: Our fragile economic recovery hinges on the ability of consumers to take on debt, and with rates climbing that means more money going to interest payments and less circulating in the general economy. In layman's terms... that ain't good.

Where do you think housing prices will be next summer in a climate of increased taxation (hello HST) and higher mortgage payments? The U.S. economy started its slide when many American homeowners woke up to find themselves owing more on their homes than they were worth. The technical term is negative equity.

Interest rates don't have to climb into double digits for our housing market to take a nose dive, even a modest climb to just 6% will have 'For Sale' signs popping up like dandelions. A mere 10% drop in equity will have a significant number of home owners owing more on their homes than their property is worth.

Higher taxes, higher debt payments, higher might just be time to legalize marijuana. At least that's a high that can be enjoyed.

John Prince, Alberta licensed real estate agent, CENTURY 21 'THE PROFESSIONALS LTD.' (Crowsnest Pass Real Estate). Serving the Crowsnest Pass and area. Call me directly at 403-564-4518 or by email at:

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