To Start – I’m Not Using ChatGPT.
I wanted to preface this article with an editorial note, much like newspapers do on their 2nd page, behind the cover. First, I’m not using chatGPT in any of my articles or emails to you. My writing is my writing, like it or not. And two – I don’t haphazardly regurgitate economic news from boring bank economists (some people are literally copying and pasting boring economic updates, just to flood your email).
Nope, not me. I really try to put some thought and consideration into what I write. I hope you appreciate it, and any and all feedback is welcome. Please email us at firstname.lastname@example.org, or fill out a contact form on our website, and let us know what you think.
Onto the Rate Announcement – Does This Feel Like Deja Vu?
In short, yes and no.
On the yes side, we could say that it feels like the same thing is happening over and and over again. The Bank of Canada (BoC for short), keeps raising the lending rate because it is trying to stifle a hot economy, where demand is high and supply is shrinking. There’s more money going after less goods, whether it’s houses, cars, or even groceries. Inflation is the result, and the BoC and government alike only respond with the only way they know how, or shall I say, the only button they have the courage to push.
It feels like deja vu because instead of our government(s)actually taking real steps to address our economic and societal issues – imbalances in our taxation system, rampant corporate greed, and the “its everyone for themselves attitude”, they do the exact same thing as before, like clockwork. They squeeze middle income Canadians where it hurts the most. In our mortgage and housing payment.
Which brings me to my next and opposing point. This isn’t like deja vu at all. Deja vu happens for a fleeting moment, a quick thought or feeling like something has happened before, but usually just for inconsequential moments. The BoC raising the rates is not inconsequential, and it’s definitely not just a feeling or fleeting. It’s real money affecting our lives, everyday. With each bump in the rates, more of us are feeling the pinch and becoming a little more stressed about the situation. It’s effects are lasting, and we Canadians as a group are feeling the stress of both inflation, and the interest rate being hiked as a result.
Can We Please Call It Like It is?
As I stated previously, our government(s) don’t have the courage to change things for the better. What’s worse is that the lower and middle classes of our country are bearing the brunt of the inflationary problem. We aren’t seeing any major concessions in the profit motive from the likes of huge multinational companies like RBC, Sobeys, or Rogers, just to name a few.
I remember back in 2009 (or thereabouts) after the financial crisis and bank bailouts, of large protests happening around the USA and Canada. The point of these protests was simple. Main Street (the middle class), vs. Wall Street (financiers, hedge funds, and banks). While the US government was bailing out hedge funds, banks and insurance companies, the middle class were suffering amid borrowing problems, higher costs, and obviously no government bailout.
We are seeing another version of this corporate bailout now. Just look at our economic environment – it’s great to be a big company in Canada and the US. Regulations and taxation are relatively low. Shareholders, executives, and lobbyists are happy, and as long as our stock market is humming in the right direction, the major players don’t see a need to change anything.
It’s quite a limited view in my opinion. Our health and happiness is not tied to today’s index price of the S&P 500 or Dow Jones.
So what can we do, if anything?
To Start – Can We Please Show Some Restraint? Well, Some Of Us Have To.
To begin, we need to show some restraint in our spending. We can hurt the bigger players with our wallets. Buying less, spending strategically, and saving our money (also strategically). Let’s hold off on those new tech purchases, the new car, the new subscription, or even your $6.00 latte. Bring coffee from home, ok? The more we spend on non-essential and discretionary items, the more it feeds our overall inflation problem. Let’s show some restraint with our buying power.
Let’s be clear – some of us have no option but to have restraint, because at this point in time, an economic reality is clear. A huge portion of Canadians live paycheck to paycheck. So when their mortgage payment increases, they have no choice but to cut back on any discretionary spending. The first things that are trimmed off the budget are non-essentials. And many people have to make difficult decisions as to which essentials need to be cut down on. It’s rough.
We still need to buy things though! We can’t just go without. So I ask to do your spending wisely. As my own kids turn into teenagers, they need lots of things. Bikes, hockey equipment, video games, etc. Instead of buying new, my kids have a newfound love for buying good things that have been used. My kids don’t care if they buy a used bike, as long as it works. We save over half of the cost compared to purchasing new, and another member of my community benefits directly from this transaction. By buying used, we bypass the corporate hand that wants its share. Lets also keep focusing on supporting local businesses, the mom and pop shops, where we know that our dollar is being circulated right back into our local economy.
What else can we do?
Well, just like the main street protests in 2009, make yourself heard! Write to your MP and MLA about your money problems. Let’s start voting for parties and politicians who will have the courage to challenge our financial systems and effect real change. We can’t do this individually, but as a group, maybe we can force the changes that are so needed right now.
Finally, where do I fit in, as your mortgage broker?
I ask myself this question quite often, and always come back to the same answer. Buying homes and refinancing your mortgage has never been tougher. More regulations and higher rates have made getting a mortgage an ever more difficult and delicate process. You don’t want that newer inexperienced person behind the bank desk helping you, because any number of things can go wrong throughout the process.
You need an experienced broker ensuring things go smoothly for you. You need a mortgage broker who stops at nothing to make your financial case to the lenders, and you need a brokerage that can secure you the best rates and keep your file organized and on time.
I’ve been in operation since 2009, and my record speaks for itself. We have helped out with over 1500 purchases since 2009, without one single client losing their deposit. We have the most 5 star google reviews out of all the local brokerages. Our clients trust us to get the job done, and that’s what we do.
In a time as uncertain as now, don’t leave your most important purchase in uncertain hands.
Signing off for now,
David Steinberg, AMP, BComm
Owner, Lead Broker
Call Me Anytime – 250-858-7160, or email us @email@example.com to discuss your mortgage needs and strategy.