And Guess who is raising their rates again?

Flaherty warns of even higher mortgage rates

OTTAWA – Interest rates are going up, and the federal finance minister says he expects them to rise even more.

The Royal Bank increased several of its posted and special mortgage rates on Tuesday, joining TD Bank and CIBC.

All three banks have increased the posted rate for a five-year closed mortgage by a quarter of a percentage point, to 5.44 per cent.

RBC also raised its special fixed rate offer for a five-year closed mortgage by the same percentage amount, to 4.39 per cent.

Finance Minister Jim Flaherty said he’s not surprised.

“The recent increase by a couple of the banks is exactly what we expected,” Flaherty told reporters in the foyer of the House of Commons.

And more increases should be coming, Flaherty predicted, since lending rates have been hovering close to historic lows.

“We’re likely to see higher interest rates as we go forward because interest rates are still very low.”

Flaherty commented as he denounced a Liberal opposition day motion calling on the Harper government to reverse a planned 1.5-percentage-point corporate tax cut.

Th3UGLYTruth? Guess who do you think has Flaherty on their Xmas list?  Guess who Flaherty “consulted” to change the mortgage rules?  With the change in rules and change in rates, guess who is holding the bag again? Exactly!!!  Guess what will happen after the summer?

New Mortgage Amortization news…who is the arse and who is the head?

Department of Finance Announces New Changes Affecting Mortgage Insurance

On January 17^th, 2011, the Department of Finance announced changes to mortgage insurance rules intended to protect the stability of Canada’s housing market.

Minister of Finance, Jim Flaherty, announced three new rules:

1)      Maximum Amortization for high-ratio loans has been reduced to 30 years from 35  years.  This change becomes effective on March 18, 2011.

2)      Maximum Loan to Value (LTV)  for refinances has been reduced to 85% from 90%.  This change will also become effective on March 18, 2011.

3)      Elimination of government backing of insurance for Home Equity Lines of Credit.  This becomes effective on April 18, 2011.

Go figure…they say that housing is headed towards a rough patch….guess what is going to happen just prior to April 18th? tick tock tick tock…who’s gonna be calling who?

Consider these:

In October 2008, shortly after the sub-prime mortgage implosion, the government spent $25 billion through the Canada Mortgage and Housing Corporation to help preserve long-term liquidity in the Canadian real estate market.

Th3UglyTRUTH? Banks trumpeted that they had to raise rates due to market disruption; did any Banks fail?  Where did the additional margins go? YUP, straight to the bankers’ year end bonuses!  They were so fat that even at a local credit union, a senior manager was overheard to brag that her bonus was equivalent to a tellers annual salary!

Then, just a year after giving the nod to 40-year mortgage terms, the government cracked down on them, reducing the maximum term to 35 years.  Last April, the screws were tightened again. It became mandatory that all borrowers meet the more stringent financial requirements for a five-year, fixed-rate mortgage — even if they were going the variable route. Home equity loans were limited to 90 per cent of a home’s market value, down from 95 per cent. And wannabe buyers of investment properties also had to cough up a down payment of 20 per cent (up from just five per cent).

Th3UglyTruth? Why is it that you had to qualify for a 5 yr fixed term but you had a hard time qualifying for a variable term?  Hmmmm….guess which had the fatter margins?

WHY is it that there are no reins on credit card debts?  Elections are coming up…is the government pretending that they are our savior again?  Flaherty ain’t a banker…who fed him the info that these should be the only way to curve our appetite for mortgage debt?