Comments on: Too In Debt To Fail? Bank of Canada Warns Real Estate May Pause Rate Hikes

By: bob

bob — Thu, 19 May 2022 18:24:11 +0000

We need to control inflation, and keep the economy healthy… (In that order) Interest rates are secondary and should fall in line if the other two are looked after. So the BoC has to earn their keep as it’s not going to be easy given much of the inflation is not a result of traditional consumer driven demand.

By: Bob

Bob — Thu, 19 May 2022 18:17:36 +0000

Decreasing property values and increasing interest rates is a perfect storm for many Self-employed individuals.
During the COVID lock downs many Self-employed clients had to qualify for ‘Alt-A’ mortgages that would allow their GDS/TDS ratios to go up to 50% as any COVID loans were included with debt payments and any COVID relief was not income. It killed the traditional 2yr average taxable income, so they moved into ‘Alt-A’ programs. Those mortgage terms are typically 1 & 2 yr terms and many of them were offered @ 2.89% . Fast forward to a year from now when these mortgages come to maturity. Those same Self-employed individuals will be facing interest rates at or over 4.99% and if the economy doesn’t pick up for them, many will be unable to move over into a more traditional discounted mortgage at renewal.
As a mortgage broker, I am concerned…

By: Joe

Joe — Tue, 17 May 2022 17:04:33 +0000

In reply to R.Froos. They also have a shit tone of benefits and wages to payout and with inflation that increases.

By: justsayin

justsayin — Mon, 16 May 2022 19:16:52 +0000

In reply to Freddy. Remember there are many in the political class that own investment properties as well. Maybe that's who they are really trying to protect?

By: Kris

Kris — Mon, 16 May 2022 18:24:56 +0000

In reply to Woolsock. Glad we gave away all the money when that flu bug hit. Morons. Print too much money, money becomes useless . Who would have thunk.

By: R.Froos

R.Froos — Mon, 16 May 2022 13:49:57 +0000

Remember that the Government also has a f$#@ ton of debt and raising interest rates affects them as well.

By: Gromit

Gromit — Sun, 15 May 2022 19:17:07 +0000

It also creates a moral hazard whereby risk takers are insulated from the consequences of their actions and those consequences are passed onto those who did not undertake such risks.

By: Angus Elliott

Angus Elliott — Sun, 15 May 2022 17:29:18 +0000

In reply to Woolsock. The pause would not protect borrowers, it would protect the banks. If the market falls ten percent banks start being exposed to negative equity. They are terrified of folks mailing them the keys.

By: Km

Km — Sun, 15 May 2022 16:59:03 +0000

Good to know the writer did some editing as to the whole speech to add the fear monger bait. Do better, you are supposed to be a journalist.

By: JM

JM — Sun, 15 May 2022 06:10:02 +0000

… Basically the only thing I’ll agree with Polievre on — Fire the entire BoC staff… or make them do their job.
This (listening to Trudeau, who’s clearly overleveraged himself) is not it. As is the sentiment above, screw the overleveredged, — they did it to themselves. The entire country needs a housing adjustment. Raising rates would be just the start.
The BoC is OBLIGATED to raise rates to control inflation. It’s their PRIMARY mandate. NOT TO DO SO would mean there is severe problems/potential political interference over there. PERIOD.