BMO Economics projects the Bank of Canada will raise its overnight lending rate in the second half of 2014. “The Bank of Canada has made no changes to its policy bias,” said Doug Porter, Chief Economist, BMO Capital Markets. “With Canadians debt-to-income ratio poised to stabilize in the months ahead and the housing sector cooling, we continue to look for a rate hike during the second half of 2014. Even so, other interest rates, such as longer-term mortgage rates, can rise well ahead of the Bank of Canada.” Frances Hinojosa, Mortgage Expert, BMO Bank of Montreal, noted that the current projections indicate the cost of borrowing to own a home will gradually increase, and buyers should take note when planning their purchase. “It remains vital for Canadians – particularly homeowners – to be prepared for the inevitable rise in interest rates.” Those living in Ontario are the most likely (34 per cent) to expect interest rates to stay steady over the next five years, whereas those in the Prairies are the least likely (27 per cent).Twenty-eight per cent ofBritish Columbians expectrates to stay steady. The report also showed that, while the timing of the rise in rates may be different, Canadians are taking the right steps — 76 per cent plan to “stress-test” their mortgage against a higher interest rate to ensure they can afford their home over the long term. Ontarians are the most likely (80 per cent) to stress-test their mortgage, while Atlantic Canadians are the least likely (62 per cent).
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Key’s kick in the teeth to first home buyers – Labour
“Nationals policy will mostly hurt low to middle income earners in provincial cities and south and west Auckland. Wealthy people buying in the hot parts of the market in Auckland will be much less affected. “Each per cent that the loan to value ratio (LVR) is hiked by adds $4,412 to the deposit for the average home in New Zealand, and a whopping $6,393 in Auckland, according to QV figures released only last week. A 10 per cent hike raises deposits by $44,125 across New Zealand and $63,938 across Auckland,” said Phil Twyford.
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