What to know when switching your mortgage from a variable to fixed rate
With variable mortgage rates on the rise, some homeowners might be wondering if it’s time to lock in a fixed rate. BNN Bloomberg’s Michelle Zadikian spoke with two experts who said “not necessarily.” While there’s no penalty to convert to a fixed rate, homeowners should consider their risk tolerance, the size of their remaining mortgage loan and the gap between variable and fixed rates – all should play into a homeowner’s decision.
Mortgage debt rises at fastest pace since 2008: CMHC
Residential mortgage debt grew about nine per cent last year, according to a Canada Mortgage and Housing Corporation report. "The levels of investments of households are quite high. So it is a source of vulnerability," one of the report’s co-authors wrote. Activity in the housing market this year, however, has slowed significantly with interest rates moving higher.
Clouds loom over Canadians' ability to grow their wealth: Desjardins
Take your pick of the factors taking a toll on Canadians’ finances — rising borrowing costs, a surging cost of living, high home and rental prices, stock market declines — all of these will make it difficult for many to grow their wealth, according to Desjardins. One bright spot, the report said, is that while growth in disposable income is set to moderate, it will still remain robust thanks to wage gains.
Does the 60/40 portfolio still stand the test of time?
It’s a general rule of thumb in the investment world: portfolios should be split between 60 per cent stocks and 40 per cent fixed income. However, many investors are seeing their portfolios tank as both asset classes have suffered downturns. Read why a newsletter from Vanguard says it’s “precisely the wrong time” to abandon the classic 60/40 split.
Canada's labour market sees worker exodus
The Canadian economy unexpectedly shed jobs in June, but it was largely driven by an exodus of almost 100,000 people from the labour force. The unemployment dropped to a record low of 4.9 per cent and wage growth accelerated. BNN Bloomberg’s Iva Poshnjari has a roundup of Bay Street reaction, including why one economist said “this is one of the strangest Labour Force Surveys in recent memory.”
"This recession will be moderate and short-lived by historical standards - and can be reversed once inflation settles enough for central banks to lower rates"
- RBC economists are the first out of the big Canadian banks to call for a recession next year. But they predict the downturn won’t be as bad as previous recessions.
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