The world economic news today has the Greek bailout plan not defaulting anymore, the British government injecting close to $80 billion into their economy and the US unemployment claims down from their forecast.

All of this news suggests a stronger world economy but it could also mean that mortgage rates may be on the rise as investors seek more aggressive investments instead of bonds.

The Bank of Canada decided to leave the overnight lending rate, and we’re all but assured that rates will remain at current levels for the remainder of 2012.  Sure, things could change but for rates to trend upwards would mean that the BOC is no longer concerned about our fragile economy.  There was also good news – the Minister of Finance said there would be no changes to the  “mortgage rules” at this time.  With the caveat that Finance is prepared to intervene if necessary. CURRENT BANK OF CANADA CONSUMER PRIME LENDING RATE IS 3.00%

As the BOC had cautiously predicted sluggish growth, at best through the end of this year, and early next, the current Bank of Canada Prime Lending Rate is unchanged and currently holding at 3.00%.

On the upside, inflation targets are coming closer to target levels, but not enough to counterbalance the threats that exist on the other side of the coin. They do expect inflation to continue to moderate, as food and gas prices begin to float down.

Many economists suggest that this latest rate hold is a sign of things to come, with the BOC required to keep borrowing costs low until the Eurozone crisis is more handily contained- which at this point, is not in the immediate future.  The BOC is still adopting their “wait and see” policy on fiscal policy, and have not ruled out further stimulus if the economy requires it.

Schedule for 2012

*Mortgage Broker News – As provided by ddunkley@dominonlending.ca www.denisedunkley.ca

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment.

To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief starting in 2009. Just another way to make mortgages reachable. www.denisedunkley.ca 

Several municipalities throughout Canada are charging a fee for processing tax payments collected by financial institutions – this fee can be passed on to the homeowner.

For those homeowners that are transferring their mortgage to another financtial institution and have previously included the property tax component in their mortgage payment, it is important to clarify how the property tax portion is processed on a payout statement. Any unused portion of property tax in a ‘sundry account’ may be deducted from the mortgage balance rather than applied as a tax payment to the municipality.

If this happens, this can create unpleasant surprises of unpaid property tax bills for the homeowner which will require attention and can take time to sort out.

In most cases homeowners can assume the responsibility to pay the property tax on their own by way of preauthorized arrangements direct with your City Tax Department.

Are you a homeowner struggling to make ends meet? Do you need help to re-organize your dollars earned and spending? I can help you ‘budget’. Call me to arrange a convenient time to sit down with you to review your finance. Let me recommend solutions that will make a difference! I can help. ddunkley@dominionlending.ca

Are you looking to purchase your first home and don’t know where to start? Are you afraid to “bite more than you can chew”? I’m willing to take the time to sit with you to show you what is needed and how long it will take. I’m willing to go the extra mile with you! Call me today 905.380.2241 no obligation risk assessment. Email me with your questions ddunkley@dominionlending.ca It all starts here with ME!

Eric Lam Financial Post May 24, 2011

The Bank of Canada’s plan to raise interest rates and exit its stimulus program has been delayed to September due to renewed uncertainty about the fiscal crunch in Europe and its potential spillover effects into Canada, the team Economics said Tuesday.

Dawn Desjardins, assistant chief economist, expects the BoC to maintain its 1.00% rate until September, and has cut the forecast rate to 1.75% by the end of 2011 from 2.00%. Banks maintains expectations for the overnight rate to hit 2.5% in mid-2012, and forecast GDP growth of 3.2% in 2011 and 3.1% in 2012.

Original forecasted rate hikes in July, September, October and December this year. The bank now only expects hikes in September, October and December.

“Combined with already-present downside risks to domestic growth in the second quarter, the Bank of Canada is likely to remain on the sidelines longer than we previously thought,” reported in a note to clients. “Complicating the outlook are global developments with the European sovereign debt crisis bringing fiscal and debt rating concerns to the forefront for investors. In the United States, economic surprises have been to the downside.”

So far, the Canadian economy looks to be holding steady with data suggesting 0.3% growth in March after a dip in February. Monthly growth figures put the economy on pace for 3.7% growth with risks on the upside.

Persistent strength in housing and growth in household credit, however, means the BoC cannot wait too long before taking action to avoid inflationary pressure.