Between appointments I was sipping my favorite branded coffee when I got talking to a Heating, Ventilation and Air-Conditioning Technician (HVAC) at the local Tim Hortons.
He inquired about the future of mortgage rates. With the experience that I have dealing with the Mortgages and the Financial Markets I thought I did a good job of explaining to this HVAC guy why the Variable is going up while the Fixed Rate (bond related) was slowly coming down. Soon enough, a sweet elderly couple from the adjoining table excused themselves into the discussion.
At the back of my mind I am always thinking that when the banks increase their Prime rate the banks also increase their lending rates. The mortgage is in line with the prime rate increase but some smaller loans like auto, small business and the credit cards are at the same time quickly increased by .50% when the prime has gone up by only .25%.
However, there is absolutely no increment in the GIC or other fixed deposits that my parents and all the other pensioners have at the banks!
Interesting isn't it? If you have a lending question, feel free to send me an email.