BOC raised rates today....

[dle]

The comment in the excerpt below is a giant crock - the radio had announced that the greedy guts 6 bigs had already upped their rates overnite on variable mortgages and lines of credit BEFORE the BOC even announced the rate increase. Guaranteed they did NOT raise the rates at all, and might not raise the rates, on your TFSA's and other savings/investment accounts. I get ticked when people say raising rates is good for us because our savings/investment rates will go up - that would be true if that actually happened but it doesn't. The banks are under zero obligation to raise the rates so if they are paying the $$ out, they might give you a pittance more but it won't be the 0.25 increase. It will cut into their bottom lines of bezillions of dollars profit each year. Grrr.

IMHO The BOC, our government, should have taken this stellar opportunity to tell the banks they don't run the show, by NOT increasing the rate causing them to have to undo all the changes they made for jumping the gun. WE know it's all bs batcrap but they should at least give the impression that BOC speaks first then banks can act. Chess game and we are the pawns.

The rate increase by the Bank of Canada is expected to prompt Canada's large banks to raise their prime lending rates, a move that will drive up the cost of variable-rate mortgages and other variable-interest rate loans.

[hobbyguy]

Like it or not, interest rates have to be normalized. They have been far too low for far too long, which has contributed to driving up housing prices, and the unprecedented levels of consumer debt.

[dle]

Like it or not, interest rates have to be normalized. They have been far too low for far too long, which has contributed to driving up housing prices, and the unprecedented levels of consumer debt.

Oh I agree, but when they needs us to boost the economy they lower the rates and encourage everyone to spend, spend, spend. Then they pull the rug out from under you when you play into their hands. I think a lot of people took advantage of the low rates and made concerted efforts to pay down any credit card/line of credit debt they had which is good.

It's the people with mortgages, who get hit here. They again encourage people to buy homes, the cheapest rate is the variable, and helps people to get their mortgage paid down quicker. Then the bank says, oh, too many people buying homes they can't afford (in some cases they are correct) so they adjust the lending rules. That is a good thing. The bad thing is right on it's heels, before they allow time to see if it worked, they BOC ups the rates which in turn ups the rates of the mortgages, putting people at risk (even the ones who bought homes they COULD afford).

Sears' closing put a LOT of people out of work, left a LOT of people without pensions. That's just one drop in the bucket of people who could be in serious trouble.

I read an bank economist report this morning saying they expect BOC to raise rates 3 more times in 2018 and 3 times in 2019. That's a lot of raises....and even if you lock in your mortgage it's going to be at a lot higher rate now that what you signed on for couple years ago with a variable. 6 more increases could mean tons of foreclosures. Then guess what, after everyone has been put through the wringer and lost their homes, etc, the bank will lower the rates because nobody is spending any money or buying homes!

It's a racket!

[hobbyguy]

For every winner there is loser.

Prudent savers have been penalized for almost a decade while profligate borrowers reaped the rewards.

As rates rise, savers benefit, profligate borrowers lose, prudent borrowers will be just fine because they planned for the increases.

[dle]

For every winner there is loser.

Prudent savers have been penalized for almost a decade while profligate borrowers reaped the rewards.

As rates rise, savers benefit, profligate borrowers lose, prudent borrowers will be just fine because they planned for the increases.

The wacky part is that the financial institutions don't raise the interest rates paid out on savings/investments in step with the BOC increases so you get screwed no matter what you are doing - saving or spending. Shouldn't be allowed - if they raise the borrowing rate when BOC raises the overnite, they should have to raise the payout to the customer on savings as well by the same percentage.

[Chyren]

I have the complete and total answer to all of this....

Its so simple that even a child could figure it out....

I'm not even a financial "expert."

Ready for this overwhelmingly simple solution to all the problems with our financial system???

Don't live beyond your means.

[Hassel99]

I have the complete and total answer to all of this....

Its so simple that even a child could figure it out....

I'm not even a financial "expert."

Ready for this overwhelmingly simple solution to all the problems with our financial system???

Don't live beyond your means.

you might find this SnL skit amusing


https://vimeo.com/41152287

[hobbyguy]

For every winner there is loser.

Prudent savers have been penalized for almost a decade while profligate borrowers reaped the rewards.

As rates rise, savers benefit, profligate borrowers lose, prudent borrowers will be just fine because they planned for the increases.

The wacky part is that the financial institutions don't raise the interest rates paid out on savings/investments in step with the BOC increases so you get screwed no matter what you are doing - saving or spending. Shouldn't be allowed - if they raise the borrowing rate when BOC raises the overnite, they should have to raise the payout to the customer on savings as well by the same percentage.

They have on GICs. Gone up almost in lock step with the last two BOC increases. BUT the US 10 year has also been rising, and so has the LIBOR. The LIBOR has been steadily rising for a couple of months, which makes me nose twitch a little...