The Saturday Weekly Review

The Saturday Weekend Review #34: Canadian mortgage rates on the rise

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Mortgage Rates Going Up Again

They say nothing lasts forever but it should come as no surprise to Canadians when they read that mortgage rates are on the rise. This rise apparently may have a negative impact on the Canadian housing market but I’m going to sit back and see how far they are willing to take this and how many Canadians are still ready to buy.

Still, I believe many Canadians are on the fence about whether they should rent vs buy because of their debt load and inability to save up as much as they want or need for a down payment. I know we have friends who aren’t sure what to do because they are still saving up for their down-payment. Owning a home is great but with it comes along plenty of work and upkeep that a new homeowner must be prepared for with time and finances.

I see more Canadians reaching out for help when it comes to setting up a budget, grocery shopping and just generally want to get out of debt so they can buy a home or life a debt-free lifestyle. My hope is that with all the information available to people whether it be through TV, Print, or On-line that they grasp the “Spend less than you earn” motto and run with it, and fast.

I remember when we first bought our home in 2009 for $265,000 and our mortgage rate which was the best we could find as a fixed mortgage at the time was 3.99%. Over the months and even years we saw that interest rate get shattered which left us scratching our heads in awe of how awesome interest rates were for new home owners.

In the 80’s when mortgage interest rates went through the roof and for those that survived it seeing the rates today must make them shiver with envy but I know that deep inside they too know all good things will come to an end. When you’ve lived through the worst it’s almost inevitable that at some point in time things may get to a point where it could put a strain on the household budget once again.

I don’t think the mortgage rates will hit 18-20%+ like in the 80’s but we should brace for some hikes and with that comes more money out of the homeowners budget and pocket. You may not see the money you are paying but over time that house you bought will soon cost you potentially more than you bargained for when you ran your initial mortgage figures in the mortgage calculator when you purchased it.

When it comes time to re-finance is when you will see how you are doing in comparison to where you were when you first took out your mortgage. Don’t be surprised, it’s not like they didn’t warn us. I just hope people were smart enough to buy a home on one income or that they didn’t get more house and mortgage than they need.  I still think that the best time to buy is when you are ready. Don’t rush, take your time and do it right.

TD Bank estimates its new mortgage rate of 3.8 per cent for the special 5-year fixed term will translate into a $130 rise in monthly mortgage payments since May for the average Canadian home owner with 25-per-cent down over a 25-year amortization period.

I’m not a super investor in the markets as I pay a financial advisor to do that for me ( I know my investment friends are cringing) but the reality is I don’t know how to do that on my own yet. If I knew I could work it out so I was making more with investments than I was blowing interest on my mortgage I would certainly jump right in. I don’t know that and that is why we decided from the start of our mortgage, just to pay it off so we were debt free.

I watch the MLS and home sales in our area but I’m betting that sales will go down as predicted and those who are deciding what to do might just kick their down-payment saving for a mortgage into high gear so they can sneak into the market while the rates are still fairly low in my opinion.

Some people questioned why we would do that with such low-interest rates and potential to funnel that extra money we have every month into other dividend paying investments but the reality is we weren’t confident enough. We live in an area where housing costs are high and it made more sense for us to just kill the mortgage and be done with it. I think over time as we continue to learn we will take the steps to invest on our own but for now, paying off our mortgage will be our priority. The money is ready to move now so soon enough we will be mortgage free before 40.

What do you think of the rising interest rates and mortgages? Shocked? Don’t care? …..

You can read the full Yahoo article here.

Gardening and Landscaping

Mallow

 

Last week I promised you a photo of our mallow and as you can see it’s in full bloom and to tell you truth just staring at it makes me smile. The flowers when they are opened up are a vibrant pink and fuchsia colour that emulates a beauty that is calming to me.

Our tomato plants are still slow-growing and I don’t know if we will get anything from them at all this year. I shouldn’t say that because there are a few tomatoes on the plants but they are not near as big as last year, this time. The weather has been less than perfect this summer but the peppers seem to be doing OK. I guess when the relatives tell us they are eating tomatoes and peppers already from their garden it makes you question how behind your plants are. Next year I’m not sure if I will grow from seed I might just buy them already done up so I can move the process along quicker OR start them even earlier indoors.

How are your tomatoes and peppers?

Blog update

Not too much happening on the blog front at the moment but we are still working on the back-end developing the new site to go live very soon. If you haven’t already subscribed to Canadian Budget Binder, please do. If you follow me through WordPress please subscribe via email so you continue to get my daily update via email after I move my blog.

Other posts I wrote this week

You can now follow Canadian Budget Binder via Bloglovin and continue to get my daily posts in this reader.

If you are a regular reader you would have already received these awesome posts in your email or reader but just in case you missed reading one I’ve put them all together here just for you.

PLUS…. check out the NEW FEATURE I’ve added which is my New Free Recipe IndexYou get all the recipes that I have posted here at Canadian Budget Binder in one spot so you don’t have to go looking for them.

Garage sailing with Jen

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Jen and her husband have made many improvements to their shopping habits and their budget. You can read all about it in her guest post, Budgeting With Mr. CBB Got Us Back On Track. Jen shares her weekly garage sale finds with us for the summer to show just how much she can save for her family.

Today’s haul:
Salad spinner (Ken just broke mine and I couldn’t get one on freecycle) – $1 (they were asking $2)
Boy’s shoes and ladies blouse – $3 (they were asking $5)
Little white car – free
Hockey stick and puck – free
Black truck for hauling cars – $.25
Total $4.25
 
We took Adam again so Ken could stain our deck, once again he was given free items 🙂
 
As I side note last week I had purchased 9 x Lego bases all for $1.  I sold them on a Facebook auction group I belong to and made a $12 profit.

Making a difference

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Each week I like to showcase a blog that I follow on a regular basis and today I give to you my good friend Shannon who runs the popular blog The Heavy Purse.

Hello Canadian Budget Binder Readers! I’m Shannon Ryan and you can find me at The Heavy Purse where I provide tips and tools on how to raise Money Smart Kids. I’m a Certified Financial Planner and proud mother to two beautiful girls, Lauren and Taylor.

My father started teaching me about money when I was thirteen, which helped me develop a healthy relationship with money. After becoming a CFP, I realized how much influence parents had on their children’s beliefs and habits around money. Unfortunately, too many kids were observing poor habits that eventually became their own. This was not the future I wanted for my girls, so I began talking to them about money when they were very young.

The lack of financial literacy in our children troubles me as I have seen how it cripples their financial lives as adults. This is why I wrote The Heavy Purse and started blogging: to help busy parents teach their children simple, value-based principles to guide their money decisions and support their long-term financial well-being. I believe teaching our kids how to handle money properly and make mindful money decisions is one of the most loving gifts we can give them.

Google search terms

web search terms

Every week I get thousands of people visit Canadian Budget Binder because they did a search online and found my blog. Here are a few of my favourite searches that may have even brought you here and you’re reading this, right now.

Top Pick of the Week:

  • A man cooking is sexy: Ya… I know now we need to encourage more men to get in the kitchen and explore
  • Dog spa: Just because every dog should go to the spa
  • Nice house: I love when I get simple visits for simple searches like this
  • Mr. Food Crockpot lasagna: Well, I have a crockpot lasagna recipe but my name is not Mr. Food!
  • Fat dog haircut: I have no idea on this one
  • Yellow Pepper: I have to say my yellow pepper gets lots of action on here. I don’t know if they are rare but I’m not complaining.

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