I read an article by Garry Marr in the National Post and it’s become entirely clear to me why savings and mortgage interest rates are so low.
For me, a term deposit yields one per cent, approximately.
For the mortgage borrower, about four per cent for a five-year renewal and a 25-year amortization.
In between, there is at least one party – possibly more – picking up the three-per-cent spread as income.
Pensioners like me are being bled down as other parties can afford overpriced real estate, resulting in insanely high property values.
The obvious driver of this low-interest pattern is the federal government trying to drive down the loonie down to US$.70 for trade reasons, and to invite foreign interests to invest in Canada at bargain prices, some of these investments in real estate.
Something is wrong with this picture.
Charles Dubois, White Rock