Robert McLister: If you’re in a variable mortgage, Ottawa’s new handouts could pick your pocket in 2025
If Shakespeare didn’t say that, he should have, because it’s true.
Governments’ yuletide generosity comes with a hidden price tag, and mortgage borrowers will foot the bill.
“We know people are under pressure. This is there to help them,” the Prime Minister argues. But that’s like helping someone put out a fire with gasoline. For Canadians with a mortgage, Trudeau is helping lenders collect extra interest more than he’s helping struggling homeowners. And there’s a long pattern of such backfiring stimulus.
For those worried about what the government will spend next, its loose purse strings add one more small benefit to fixed mortgages. That’s especially true when Canada’s policy rate (now 3.75 per cent) is below the neutral level of interest, which the Bank of Canada estimates at 2.75 per cent, give or take. The lower rates fall relative to neutral, the better one’s odds in a fixed rate in general.
Holding our leaders accountable for sustainable fiscal management creates a higher long-term standard of living for all. It’s what all Canadians should demand from politicians, not just the mortgagors footing Ottawa’s bill.
Mortgage rates
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