BIG SIX BANKS REPORT ‘OBSCENE’ RECORD $34.8 BILLION IN PROFITS FOR 2015...AND STILL COMPLAINING! This heading is from ‘CanadaMortgageNews.ca’ and we think, is really a headline that deserves some deep thought. “RBC reported a $10 Billion annual profit for 2015, almost a third of the whole, gigantic profit pie. Yet they are crying the blues and warning of troubled times ahead. (uh, that’s the same speech they’ve made for the past 10 years) this article points out. “Year after year after year the BIG SIX BANKS continue to report record profits and then raise our banking fees, hire foreign temporary workers and fire Canadian employees, and then use off-shore staff to cut their overhead and increase profits further.” All the while, year after year raising ‘outlook’ concerns and the likelihood of rising rates. Research shows that in fact BIG BANK PROFITS have grown collectively from $19.5 Billion in 2010 to over $34.88 Billion last year. This is a mind boggling increase of $15.3 Billion higher or approximately 75 per cent in just five years. Our BIG BANKS ARE SO POWERFUL now that they ignore Bank of Canada efforts to stimulate the struggling economy, but not passing on reductions in prime rate. We suggest to you that a big part of this almost sickening profit scenario comes from MORTGAGE PENALTIES. Such penalties used to be equal to 3 months interest. Today through years of manipulation, bank mortgage ‘break’ penalties are roughly 4 times more. Let’s think of this as a 400% increase shall we. Ten years ago we were used to seeing penalties of $2,000, $3,000, $4,000. Today it is not unusual to see $10,000, $15,000 even $20,000 plus. Can you imagine this happening to you? Well it happens every day! You see, people do not expect they will need to break their mortgage within the term (most are 5 years) but life happens...job transfer, job loss, divorce, personal credit problems, a better opportunity to move up (or down), and yes, death in the family. We see it all. Consequently upwards to 40% need to break their mortgage AND OUCH!!! Because BIG BANK PENALTIES ARE NOW SO HIGH, many have no choice but to stay in the mortgage. Others are less fortunate get nailed. Big time! Folks, your best protection against getting hosed is to seek out a reputable mortgage company such as ours. Our lenders are both fairer and more competitive in terms of rate and terms. For your next mortgage need, please call us first!
Month: February 2016
RATES GOING DOWN LIKE GAS PRICES
Exactly one month ago the Financial Post carried a front page article ‘Why Home
Owners And Buyers Can Expect More Rate Hikes From Big Banks’. This was after RBC
had raised its rates 10 basis points followed quickly by two others. The article gave the
appearances of perhaps being bank inspired.
This appeared to be a ploy to create the perception that rates were on their way up,
which in the face of falling government bond yields, could not be sustained. In fact rates
have headed down since.
Banks want to create the fear of rising rates any way they can, to get people to jump in
either with a new mortgage or lock into fixed from variable. Then they can charge those
folks IRD Interest Rate Differential penalties (which can be four to five times higher than
three months interest) if they decide to sell within the term. Bottom line? More profit for
Not only have we not seen gas prices this low for decades, but mortgage rates have hit
a new ‘all-time’ record low. Our very best unpublished 5 year fixed rate is now an
incredible 2.54% for our best customers versus 2.94% for the lowest bank. Bank posted
is 4.64%. People believed that 2.99% on a few occasions over the past couple of years
was rock bottom. Now look!
The prospect of rates climbing is now minimal as our economy flirts with a new
recession and the Bank of Canada is considering negative interest rates following the
lead of a few other G7 countries. Unemployment remains high and inflation is in check
with exception of food prices. Deflation still remains a possibility.
In other words it is a great time to borrow to renovate, refinance, invest of income
property and sell or buy a home.
Look for our door knocker flyers coming soon with an incredible offer for those thinking
of moving this year. It will knock your socks off. Please call Ron if this is you.
And remember we will pay you $500. cash* if we can’t beat the banks’ offer. Certain
If your mortgage matures this year, please do yourself a favour and give us a call to
beat your current lender. Blindly signing back the renewal offer is like throwing money
down the drain. Let us help you save.
HOW TO AVOID COSTLY HOUSING MISTAKES DURING DIVORCE!
Divorce is a very difficult and emotional time. Emotion and finances don’t often mix well
What you need most are straight forward, specific advice about how divorce affects the
matrimonial home, your mortgage and taxes making critical decisions easier.
Professional, neutral third party information can help you make more logical, rather than
A few basic questions are:
1. Who wishes to continue to live in the house?
2. Will the familiar surroundings bring you comfort and emotional security or unpleasant
3. Do you want to minimize change, for example keeping the kids in the same school in
order to minimize disruption etc?
4. Do you want to move to a new place that offers a fresh start?
All have financial consequences to your decision process:
1. What can you afford?
2. Can you manage the old house on your new budget?
3. What are all the costs involved?
4. Is refinancing possible or is it better to sell and buy again?
5. How much house can you buy on your new budget?
There are four main options available:
1. Sell the house and divide up the proceeds.
2. Buy out your spouse.
3. Have your spouse buy you out.
4. Retain Joint Ownership with one spouse living there for foreseeable future.
Circumstances warrant postponing a financial decision until a later date.
This is also largely a legal matter so you must understand the law. Also everything
needs to be agreed upon in writing.
We have extensive experience in this area and we are here to help guide you in making
the best informed decisions for you to ease your financial situation. We will also be able
to provide you with names of experienced legal practitioners. However please
understand that it is best done after an initial financial forensics first.
If you or someone you know are or have separated or are in the midst of divorce, please
give this article to them.