Our government certainly keeps things interesting…
Today, Finance Minister Jim Flaherty announced they’re tightening the rules on our housing market. Flaherty confirmed Ottawa will reduce the maximum amortization period to 25 years from 30 years, reduce the maximum amount homeowners can take equity out of their homes for refinancing purposes from 85% to 80% and “fix” the gross debt service ratio at 39%, with the maximum total debt service ratio at 44%. These changes will come into effect July 9th. I found this last change interesting, and no, not the July 9th date.
Wasn’t it just a few weeks ago, I wrote about these service ratios and what I thought of them? I could have sworn the fine folks lending us money for our houses want our gross debt service ratio (GDSR) lower than 32% and our total debt service ratio (TDSR) less than 40%. Ahem, new ratios are 39% and 44% respectively. Am I missing something? Maybe for this last change, headlines should have been “new rules allow Canadians to borrow more money”?
I know around our house, we’re trying to pay down debt more aggressively – the mortgage. When I can, I’d love to invest more in broad market ETFs and dividend-paying stocks but some of the products and companies I’d like to buy seem a bit expensive to me right now. So, that leaves me with this…paying off my fat credit card bill this month…I replaced the air conditioner in my 12-year-old car this week and it cost $500. That’s the price of being cool folks, literally.
Enough from me; check out some fine articles from around the blogosphere. I’ll be back next week with a report on our 2012 personal finance and investing goals.
Have a great weekend!
Modest Money was kind enough to include yours truly in a list of Top Canadian Investing Blogs. Thanks for the support, and with your vote, I hope to make the short list!
The Loonie Bin had a great Q&A with do-it-yourself investor Susan Brunner.
Canadian Couch Potato provided a six-month report card on Vanguard Canada’s ETFs.
Beating The Index shared his perspective on Shoreline Energy.
Andrew Hallam said $50,000 per year could cause financial misery.
MDJ offered some tips to getting the biggest bang for your home reno buck.
Dividend Ninja compared XBB vs. XSB. Both are great products.
Big Cajun Man said it was hot, hot, hot.
Canadian Finance Blog offered some suggestions if you cannot afford a vacation this year.
Michael James on Money shared some important equations to answer for your retirement plan.
Tusk Trader on WDAMMG discussed currency risk.
Jim Yih outlined some behaviours and emotions that affect our investing success.
Passive Income Earner provided some clues to uncover if you have a debt problem.
The Financial Blogger shared progress made on his personal finance goals.
Teacher Man on Y&T wrote about TFSA vs. RESP contributions.
Financial Highway said stocks are not risky anymore.
Steadyhand said some investing risks provide clear and present danger. I liked this part: “Looking forward…investors should be asking the question of which investment looks more risky: (1) a security where the underlying issuer is running a large operating deficit, piling up new debt, and offering a negative real return over the duration of the investment – i.e., U.S. Treasury bonds; or (2) a security where the underlying issuer is generating positive and improving cash flows, paying a growing dividend, and has a strong balance sheet – i.e., blue-chip corporations.” I know my answer.
Boomer & Echo discussed building your retirement plan, another well-written article.
The Brighter Life wondered if the Canadian economy is in trouble. I found this part interesting regarding interest rates: “Until we see a better resolution in the eurozone and a stronger U.S. economy, the Bank of Canada is not going to jump out too far ahead, particularly given that the U.S. Federal Reserve has already said it’s not going to raise rates until 2014.”