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Category: FYI/Blog

Scared to spend your retirement savings?

Q: I’m 56, have no debt, make about $78,000 a year and own my townhouse. I will have a small defined benefit pension (about $17,000 per year) at 62. Right now I have about $450,000 in RRSPs, non-registered investments and pension combined. I plan to quit at 59, then work three more years at an easy job just to maintain my expenses. Then I’ll retire for real at 62 and work part-time.

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Ten obstacles to getting the best mortgage rate

Anyone with a mortgage wants the lowest possible rate. But there’s an array of requirements for snagging the best all-around deal, and some of them are counter-intuitive. Once people have chosen the term and rate type for their mortgage, they often find that rates for that same term can vary by a percentage point or more. Countless factors can keep borrowers from getting a rock-star deal. Here are 10 of them:

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Average home price of affluent Canadians tops $1.5-million

Affluent Canadians are sitting on an average value of $1.5-million for their homes, a recent poll indicates.

That compares with an average price of $448,862 for homes sold in April, according to the latest figures from the Canadian Real Estate Association.

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Need a mortgage on a cottage? Here’s what lenders look for

“Lenders will look at the location, proximity to a major market, sometimes is it on a big lake, is it on a small lake, access to the property, year-around is best, paved roads is a plus,” … “Lenders will want to ensure that there’s a safe and consistent water source as this can sometimes materially impact the marketability and value of the cottage.”

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Poloz comfortable leaving rates steady, despite volatile climate


11:33 EST Tuesday, May 19, 2015

Stephen Poloz says the Bank of Canada is struggling to get a good reading on inflation because of a raft of temporary factors, including the oil price plunge and the cheaper Canadian dollar.

But the central bank governor said he’s not about to react to every blip in inflation. The bank’s key overnight interest rate is now at 0.75 per cent.

“It wouldn’t make sense to respond to every wiggle in the inflation rate,” he said in remarks prepared for a speech Tuesday to the Greater Charlottetown Area Chamber of Commerce.

The bank’s “current best judgment” is that underlying “trend” inflation is running at 1.6 to 1.8 per cent – still below the bank’s official 2-per-cent target.

The bank’s job is made more difficult because the lower dollar is temporarily boosting inflation, while lower oil prices are driving inflation lower.

And yet the price of crude has regained some of its lost ground in recent weeks, rising above roughly $60 (U.S.) per barrel – whichhas helped lift the Canadian dollar.

“All of this has certainly made it more challenging to distinguish the trend from the temporary,” Mr. Poloz said.

He noted there are “a lot of moving parts” clouding the inflation outlook.

In a mostly upbeat speech, Mr. Poloz said the Canadian economy remains on track to reach full capacity and sustainable growth by late 2016. “We project it will take 18 months or so to get there,” he said.

Ignoring recent signs of economic weakness – both in Canada and the U.S. – Mr. Poloz instead highlighted a number of positive trends, including a rebound in key exports outside the oil patch, a decline in long-term unemployment, more prime-age Canadians joining the labour force and early signs of a recovery in the creation of new companies.

A basket of key non-energy exports tracked by the bank is up 15 per cent in the 12 months through March, he pointed out. That includes jumps of 20 per cent in aerospace, 11 per cent for machinery and equipment and 4.5 per cent in foreign tourism demand.

Mr. Poloz said he’s also upbeat about business investment outside the energy sector. He pointed out that companies selling into the U.S. are starting to “feel capacity constraints” and may need to “step up investment.”

Many economists are much less optimistic, pointing to a slowdown in U.S. growth early this year and still-weak business investment across most industries in Canada.

Mr. Poloz also highlighted how lower interest rates and cheaper gasoline are helping Canadians. He said a household renewing a $100,000 mortgage is saving $250 a year on interest payments. Likewise, lower gasoline prices are saving households $500 a year, he said.

The Bank of Canada has kept its key interest rate unchanged at 0.75 per cent since January, when it surprised investors with a quarter-percentage-point rate cut.