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When 15 per cent was a good rate for a mortgage

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A high bank rate meant high mortgage rates for home buyers in 1981. (CBC Archives/The National)

Good news: the bank rate had gone down. 

Bad news: it was a marginal decline.

Worse news: the new rate was 17.08 per cent.

That was still great news for savings and investments in February 1981, but not for anyone looking to borrow money.

“There will be no relief from 15 and 16 per cent mortgages, either,” said George McLean, host of CBC’s The National.

“What are you going to do?” asked loan officer and prospective home buyer Carey Halavin. “You have to accept it.” (CBC Archives/The National)

But, as reporter Fred Langan found, those high rates didn’t seem to be frightening home buyers.

Carey Halavin and her husband sold a house in the suburbs of Toronto to buy one closer to the core.

‘It bothers you’

“If you have to buy a house and that’s what the mortgage rates are, what are you going to to?” she asked. “You have to accept it.”

She should know: she worked as a loan officer for a bank.

“It bothers you,” she added. “The payments are high but you can’t do anything else. Those are the rates.”

“I don’t think people think that we’ll ever see 12, 11 [per cent mortgages] again,” said real estate agent Di-Lin Baker. (CBC Archives/The National)

Langan then broke down the math. At 10 per cent interest — by then a figure of nostalgia not seen since July 1978 — a $50,000 mortgage cost $447 per month in payments.

At 15 per cent, those payments went up to $623.  

‘They don’t pay attention to the rate’

But it didn’t seem to matter, according to real estate agent Di-Lin Baker. 

“They just decide that they have to buy a house and they don’t pay attention to the rate,” she said. “Or they buy a less expensive house.”

She agreed that people had come to accept mortgages of 15 per cent.

Reporter Fred Langan found that Canadians had learned to live with high interest rates of 15 or 16 per cent. (CBC Archives/The National)

“I don’t think people think that we’ll ever see 12, 11 [per cent] again,” she said. “Maybe not even 13.”

It wouldn’t be until November of 1983 that mortgage rates would drop below 13 per cent; it was May 1986 before they dipped to less than 11 per cent.

Langan, standing in a parking lot in downtown Toronto with the CN Tower over his shoulder, said the mortgage market had dried up when rates first shot up a year earlier. 

“But now that has changed,” said Langan. “That means Canadians have learned to live — and pay for — inflation and high interest rates.” 

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Ontario’s new automated speed enforcement explained

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(NC) To wage the war against speeding, many municipalities across Ontario have turned to automated speed enforcement. Most recently introduced in Toronto, speed cameras are a high-tech solution to reduce speeding and are considered one of the most effective ways to create safer roads and save lives.  

Recognizing police officers cannot catch all speeders, these cameras fill the gap, providing monitoring in specific locations around the clock. When a car’s speed is even one kilometre over the posted amount, it will take a picture of the offending vehicle’s license plate, using the captured photo as indisputable evidence. A ticket is then served to the vehicle’s owner, regardless of who was driving. 

With a focus on high-risk areas, Ontario’s automated speed enforcement cameras are located in two specific municipal areas: school and community safety zones. School zones are designated streets close to a school, featuring reduced speed limits as dictated by local bylaws. Community safety zones are high-risk corridors and intersections, subject to increased fines and penalties.  

While the Ontario Highway Traffic Act outlines the use of automated speed enforcement, municipalities can decide when and where to use cameras to curb speeding. The act does dictate financial penalties for speed violations captured with cameras, which vary depending on the number of kilometres caught over the speed limit.  

Speed enforcement is not new, but part of a broader, integrated road safety strategy that includes infrastructure improvements, awareness campaigns and new uses of technology. City officials hope for a halo effect, inspiring better driving behaviour across entire communities, not only in areas with cameras. A controversial topic, some critics take exception to speed cameras, labelling them as sneaky cash grabs for municipalities. Governments think the opposite. 

Safety advocate and auto insurance provider Onlia is hopeful that the cameras will provide drivers with a reminder to slow down, especially in high-risk areas like school and community safety zones.  

For those who obey the speed limit, automated speed enforcement shouldn’t change anything about your driving style, says Alex Kelly, Safety Ambassador at OnliaDrivers have fair warning as they approach areas with speed cameras, as mandatory signs provide reasonable notice of upcoming automated speed enforcement. Regardless of warnings, the best speed is the posted speed. 

You can start to understand your speeding style by downloading the insurance provider’s new safe driving app that coaches and rewards for you for safe driving habits.

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Online banking: How to protect yourself from fraud

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(NC) Since the start of the COVID-19 crisis, a growing number of consumers are regularly using mobile and online banking to paybill payments, transfer money and make purchases.

Although these tools can give you easy access to your personal finances on demand, there are also some risks involved. For instance, your banking information—such as your debit or credit card number, user name, or personal identification number (PIN)—could be stolen. If criminals have access to your online banking information, they can steal your money, which is why it’s so important to be  vigilant when you bank online.

Follow these tips to help protect your personal and banking information:

  • For your online bank accounts, use a strong password that can’t be easily guessed, and never share your user name or password with anyone.
  • Check your accounts regularly to make sure there are no transactions you didn’t make or authorize.
  • When making online purchases, never authorize a website to save your credit card information, password or other personal information. Giving websites this permission will save you some time the next time you access the site, but it poses a real threat if a hacker manages to access your information.

Most financial institutions have policies to protect you from transactions that you didn’t make.

However, you are responsible for protecting your online and mobile banking information. If you give your details to anyone—including your spouse or partner, a family member or a friend—your financial institution may hold you responsible for any unauthorized transactions in your account, and even strip you of protection from unauthorized transactions in the future.

If you suspect your information may have been compromised, change your passwords immediately, and check your account and credit card statements for anomalies and report any suspicious transactions to your financial institution.

The Financial Consumer Agency of Canada has created resources to help you protect your online banking information.

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Payday loans: Not the best way to borrow money

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(NC) Payday loans are a very expensive way to borrow money. Even if you’re struggling financially, think twice—and crunch the numbers—before getting this type of loan.

Depending on the rules in your province, payday lenders can charge fees of $15 to $25 per $100 that you borrow.

As an example, let’s say you borrow $300 for home repairs. The payday lender charges you $51 in fees, or $17 for every $100 borrowed. Your loan balance is therefore $351, which amounts to an interest rate of 442 per cent.

There can be serious consequences if you don’t repay your loan by the due date. These may include the following:

  • The payday lender may charge you a fee if there isn’t enough money in your account.
  • Your financial institution may also charge you a fee if there isn’t enough money in your account.
  • The total amount that you owe, including the fees, continues to increase.

There are better options out there

Payday loans should be your last resort to borrow money. Consider cheaper ways of borrowing money, such as:

  • Cashing in vacation days or asking for a pay advance from your employer.
  • Getting a line of credit, a cash advance on a credit card or a personal loan from your financial institution.
  • Getting a loan from family or friends.

Before getting a payday loan and to avoid getting stuck in a debt trap, consider other, less expensive ways to borrow money.

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