I received a question by email from Judy, who’s considering switching her line of credit over to a fixed rate mortgage to lock in the current low rates. I wanted to share it here for two reasons, I’d like to see what other reader’s opinions are on this and thought it might help other readers…
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Category Archives: Mortgage
What is CMHC Mortgage Insurance?
The Canada Mortgage Housing Corporation (CMHC) provides mortgage loan insurance to lenders for home buyers with a down payment of less than 20%, to as low as 5%. However, this is not to protect the buyer, it is used to protect the lender. CMHC insurance guarantees the bank or credit union that it will not…
The Basics Of The Smith Manoeuvre
The Smith Manoeuvre is a strategy that Fraser Smith developed as a financial planner and then wrote a book about it in 2002. Its basic premise is to make your mortgage tax deductible, but it can do so much more for your personal finances than just that. To properly execute a Smith Manoeuvre, you need…
Moving Day!
The wife and I are moving into our new house today! We had personal reasons to move, like wanting to be in a nicer house and neighborhood with a baby on the way this fall. There were also a few financial reasons that made us decide that now was a good time to make the…
Contribute To RRSP or Pay Down Mortgage?
This might be the most asked personal finance question in Canada, should you contribute to an RRSP or pay down your mortgage? Most people would lean towards putting money into an RRSP because of the tax credit and the possibility of a higher return. When considering the tax benefits of the RRSP option, some people…
Record Low Prime Rate
Yesterday, the Bank of Canada cut its key interest rate another 0.25%, down to a record low of 0.25%. All the major banks followed suit and lowered their prime rate by 0.25% as well. Effective today, the banks now have a prime rate of 2.25%. If you have a mortgage at Prime -0.75% then you…
Increasing Your Mortgage Payment
I wrote previously about how accelerated bi-weekly mortgage payments can pay your mortgage off sooner. In that post I used this example, if you have a $200,000 mortgage, amortized for 25 years @ 5%, and bi-weekly accelerated payments, you would pay $124,095 in interest and will have the mortgage paid off in 22 years. The…
