mortgage – mackaycartoons

Thursday November 2, 2023

November 2, 2023 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday November 2, 2023

Haunted by High-Interest: The Looming Spector of Canadian Mortgage Renewals

In the eerie aftermath of Halloween, a haunting spector looms over Canadian mortgage holders, threatening a grim future of financial distress. The dread doesn’t come from ghouls or ghosts but from the imminent renewal of mortgages, unleashing a chilling cascade of increased interest rates set to torment thousands.

August 29, 2023

Recent analyses by RBC reveal a daunting reality: more than $900 billion in mortgages within Canadian banks are slated for renewal over the next three years. This impending wave of renewals, as pointed out by RBC researchers led by analyst Darko Mihelic, spells potential financial peril for many homeowners. An alarming 60 per cent of mortgages in Canadian chartered banks are anticipated to undergo renewal by 2026. As fixed-rate mortgage terms established prior to the Bank of Canada’s interest rate hike in October undergo renewal, borrowers are slated to face staggering increases in their monthly payments, a significant burden detailed in the report titled “Canadian Banks: A Review of Mortgage Payment Shock.”

The report forewarns that unless interest rates experience substantial declines, credit losses are bound to surge, potentially peaking in 2025 and beyond. These credit losses are estimated as outstanding payments owed to companies, including mortgage defaults. Alarming as it is, this prediction aligns with the Office of the Superintendent of Financial Institutions’ directive to major banks to bolster reserves for potential debt defaults, nearly tripling the amount set aside for bad loans compared to the previous year.

News: About 60% of outstanding mortgages facing payment shock in next 3 years: RBC

July 18, 2023

While some industry experts like Carl De Souza, senior vice-president at DBRS Morningstar, express confidence in the resilience of major Canadian banks against mortgage defaults, the forthcoming surge in renewals poses a significant threat to banks’ profitability and homeowners’ financial stability. However, the report suggests that the impact of mortgage losses might be mitigated to some extent due to Canada’s relatively low unemployment rate, which remains below pre-pandemic levels.

Nevertheless, the impending renewals paint a stark picture for homeowners. Banks are exploring options to alleviate the impending financial shocks, including renegotiating mortgage terms from variable to fixed rates. Currently, more than half of Canadians opt for a three-year fixed-term mortgage, but the stark difference in interest rates from previous years is ominous. Rates for a three-year fixed-term mortgage have climbed substantially, with estimates indicating a potential surge from the comparatively lower rates of 2019 to an alarming 6 to 8 percent at renewal, spelling financial distress for borrowers.

The report predicts a staggering increase in payments at each milestone year. In 2024, more than $186 billion in mortgages will renew, signifying a 32 percent payment shock. By 2025 and 2026, the looming numbers continue to surge, with estimated renewals of $315 billion and $400 billion, respectively. Payments are expected to soar by 33 percent and a staggering 48 percent, respectively, on a weighted average basis.

News: As inflationary pressures grow, Canadians increasingly struggle to make monthly mortgage & credit card payments

May 13, 2010

Even if there’s a hopeful return of the Bank of Canada’s key interest rate to 0.25 percent by 2026, the projected increase in payments still stands at a significant 20 percent. RBC’s estimations suggest a potential return to a lower interest rate in the future, yet the haunting reality of surging payments remains a foreboding certainty.

The post-Halloween season brings no respite as the grim spector of mortgage renewals hangs ominously over Canadian homeowners. The alarming forecasts and stark statistics paint a chilling picture of financial turmoil, urging caution and preparedness to weather the impending storm of high-interest renewals. (AI)

Tuesday July 18, 2023

July 18, 2023 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday July 18, 2023

The Struggles of Staying Home: Variants of Concern and Skyrocketing Interest Rates

November 30, 2021

In recent times, people have been facing multiple challenges that keep them confined to their homes. Two significant issues that have played a role in this situation are the emergence of Variants of Concern (VOC) during the COVID-19 pandemic and the sudden increase in interest rates, impacting variable rate mortgages. These circumstances have led individuals to prioritize financial stability over indulging in luxury and recreational activities like visiting restaurants, bars, movies, and vacations. Let’s explore the impact of these interconnected factors on people’s lives.

The COVID-19 pandemic has witnessed the emergence of various variants of the virus. While most variants do not significantly alter the virus’s properties or its impact on communities, some Variants of Concern have raised alarms. These variants exhibit changes that affect crucial factors such as transmissibility, virulence, vaccine effectiveness, and diagnostic testing. Detecting and monitoring these variants is of utmost importance to prevent their rapid spread and devise appropriate strategies to contain the virus.

January 30, 2021

One such method used to identify VOC was through the testing of wastewater in Ottawa. However, due to limited funding, the rapid and cost-effective testing method for variants will soon cease. This decision has raised concerns among scientists and researchers who stress the importance of timely and frequent monitoring of variants. Identifying emerging VOC and estimating their growth within a community becomes increasingly challenging when testing frequency is low. It is vital to maintain robust monitoring systems to stay ahead of the ever-evolving COVID-19 virus.

January 27, 2022

In parallel, the recent surge in interest rates has significantly impacted homeowners with variable rate mortgages. The Bank of Canada’s consecutive interest rate hikes have left borrowers grappling with higher borrowing costs. This increase comes after a brief respite when interest rates remained steady, fueling a surge in home sales and prices reminiscent of the pandemic’s real estate boom. However, the central bank’s efforts to curb inflation have now placed borrowers under mounting pressure.

Variable-rate mortgage borrowers face the immediate burden of rising costs as more of their monthly payments are allocated towards interest rather than reducing the size of their loans. Consequently, the length of their loan repayment periods automatically extends to maintain steady payments. While some borrowers managed to make additional payments during the rate reprieve, the recent interest rate hikes will further stretch their amortization periods. As a result, borrowers will face higher monthly payments when their loans come up for renewal, leading to potential financial strain.

June 22, 2021

The impact of these rising interest rates is also evident in the housing market, particularly in major cities like Toronto. The market, once characterized by frenzied activity, has started to show signs of cooling. Home sales have decreased, reflecting buyers’ growing caution and concerns about future increases in interest rates. The once-enticing real estate landscape has now become a cause for hesitation and financial prudence.

These converging challenges have limited people’s mobility and hindered their ability to engage in leisurely pursuits. The combination of Variants of Concern and rising interest rates has reshaped priorities, pushing individuals to focus on financial stability rather than indulging in luxuries or non-essential activities. Restaurants, bars, movies, and vacations have taken a backseat as people adapt to the new reality, emphasizing the importance of financial planning and prudent decision-making.

As we navigate these challenging times, it is crucial to find a balance between safeguarding public health and maintaining economic stability. Timely monitoring and surveillance of COVID-19 variants, along with supportive measures to help borrowers cope with rising interest rates, will be essential in enabling individuals to regain a sense of normalcy. By addressing these concerns, we can strive to create a safer and more sustainable future, where people can confidently venture out from their homes without compromising their well-being or financial security. (AI)

Tuesday January 24, 2023

January 24, 2023 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday January 24, 2023

Liberal Cabinet Retreat

Prime Minister Justin Trudeau made his first stop in Hamilton Monday a chance to grab lunch to go with MP Filomena Tassi at The Burnt Tongue on Locke Street.

October 28, 2022

The prime minister and his cabinet are staying in town this week from Jan. 23 to 25 for their post-holiday retreat.

After ordering a cheeseburger and broccoli cheddar soup, Trudeau took a moment to shake hands with the lunch crowd and pose for some photos.

Leaving the restaurant, he posed for a photo with Ashley Acacio and her three-week-old son Mac in his stroller, even correcting the position of a staffer taking a photo for the pair.

On the way to his vehicle, Trudeau hopped on an HSR bus that stopped to greet riders.

Meanwhile, about 200 demonstrators gathered downtown Monday to protest the retreat, calling for migrant rights. They were joined by anti-war demonstrators and about 25 anti-Trudeau and anti-vaccine mandate protesters.

The protesters marched along Main Street, across Summers Lane and blocked King Street in front of the Sheraton Hamilton Hotel for around 20 minutes.

Trudeau’s itinerary said he is expected to attend the retreat, which will focus on affordability and the economy, at 5:30 p.m. Monday. (Toronto Star)

December 9, 2022

Meanwhile, it’s at the grocery store. It’s at the gas pumps. It’s at your favourite restaurant.

Nearly everywhere Canadians have gone in the past year, every bill might as well have had an extra charge tacked on to the bottom reading simply: inflation.

A shorthand for what’s essentially the rising cost of living, inflation swept across the globe in 2022 and Canada was not immune from its sting.

Canadians eager to travel in June after years of COVID-19 restrictions were met by a 49.7 per cent year-over-year hike in the cost of accommodations. The rest of that summer saw the average price for regular gasoline soar past $2 per litre in many parts of the country. And in October, Canadians were paying 44.8 per cent more for pasta from the grocery store than the same month a year earlier.

April 25, 2014

Poll after poll showed how stretched Canadian dollars had become amid 40-year highs in inflation, with many forced to make impossible decisions about how to feed their families, pay for medications and keep a roof over their heads.

More than a third (36 per cent) of Canadians say their financial situations are very bad or somewhat bad heading into 2023, according to Ipsos Public Affairs polling conducted exclusively for Global News between Dec. 14 and 16. (Global News)

In the swearing-in of cabinet following the 2021 federal election, the dropping of the awkwardly named Minister of Middle-Class Prosperity, held by Mona Fortier, signalled the short termed portfolio (2019-2021) was an ill conceived addition to the executive team under Prime Minister Trudeau.

Friday October 28, 2022

October 28, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday October 28, 2022

Freeland warns of ‘difficult days ahead’ as Canada’s economy shows sign of weakness

Finance Minister Chrystia Freeland issued a warning to Canadians Wednesday — the coming months won’t be pretty as rising interest rates slow a once red-hot economy and force some people out of their jobs.

June 17, 2022

The Bank of Canada’s recent rate hikes to tame sky-high inflation will increase borrowing costs for businesses and consumers alike, which will send shockwaves throughout the economy, Freeland said.

Speaking at an auto industry conference in Windsor, Ont., Freeland said she would be honest with Canadians about the roadblocks that lie ahead and the threat of higher unemployment and mortgage rates — developments that could hurt many households.

“Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming. Our unemployment rate will no longer be at its record low. That’s going to be the case in Canada. That will be the case in the U.S. and that will be the case in economies big and small around the world,” Freeland said.

“There are still some difficult days ahead for Canada’s economy. To say otherwise would be misleading.”

January 27, 2022

The Bank of Canada — like other central banks, including the U.S. Federal Reserve — has been aggressively raising rates this year to establish price stability and achieve its 2 per cent inflation target.

With inflation so sticky, economists are expecting more rate hikes to reduce demand and cool the economy. That could prompt a recession sometime in 2023.

While inflation has slowed somewhat in recent months as energy prices have stabilized, Freeland said the government will not be able to help everyone ride the inflationary wave.

“We cannot compensate every single Canadian for all of the costs of inflation driven by a global pandemic and Putin’s invasion of Ukraine,” Freeland said.

But she promised relief for the poorest Canadians who are most vulnerable to sudden spikes in the cost of food and rent.

June 22, 2021

During question period in the House of Commons on Wednesday, Conservative Party leader Pierre Poilievre said the federal Liberal government’s “half-trillion dollar inflationary deficits” over the past two fiscal years are responsible for the higher costs.

Pointing to the planned low-income supports, Poilievre said the prime minister has done “nothing for the vast majority of struggling families.”

“Even the small minority who do [receive the supports] will find it gobbled up by increased inflation,” he said, citing a recent RBC Royal Bank report that found the average family will lose $3,000 in purchasing power this year as a result of higher prices and interest rates.

He called on the government to scrap planned hikes to the federal carbon levy — something Poilievre has called a “triple, triple, triple tax” that will drive food prices higher because it will impose added costs on all parts of the supply chain.

August 12, 2022

In the face of Tory criticism, Freeland said the federal government will continue to tighten its belt in the coming months so that Ottawa doesn’t inadvertently drive inflation.

“Canadians are cutting back on costs and so too is our government. That’s our part … to not make inflation worse and more enduring,” she said.

Asked later by reporters if the government has more inflation relief planned, Freeland said now is a time for fiscal restraint. (CBC)

Friday October 21, 2022

October 21, 2022 by Graeme MacKay

By Graeme MacKay – The Hamilton Spectator – Friday October 21, 2022

Hasta la Vista? This Time, Boris Johnson May Say, ‘I’m Back.’

It seemed at once incredible and inevitable.

September 7, 2022

No sooner had Prime Minister Liz Truss of Britain announced her sudden resignation on Thursday afternoon than a familiar name surfaced as a candidate to succeed her: Boris Johnson, the prime minister she replaced a mere 45 ‘ days ago.

Mr. Johnson, who is vacationing in the Caribbean, has said nothing publicly about a bid for his old job. But the prospect of Boris redux has riveted Conservative Party lawmakers and cabinet ministers — delighting some, repelling others, and dominating the conversation in a way that Mr. Johnson has for his entire political career.

Nor is the idea of his return merely notional: Among those who are keeping tallies of the voting intentions of lawmakers, including some London news organizations, Mr. Johnson is only slightly behind his chief rival, Rishi Sunak. On Friday morning, Jacob Rees-Mogg, who is currently the business secretary and served under Mr. Johnson, became the first cabinet minister to endorse his former boss.

September 6, 2019

Mr. Johnson received both endorsement and criticism as the contest to succeed Ms. Truss gathered pace on Friday. Penny Mordaunt, now a senior minister, became the first to publicly declare her candidacy. She is considered one of the leading contenders along with Mr. Johnson and Mr. Sunak.

The prospect of Mr. Johnson back in 10 Downing Street appalls many Conservatives, who argue that voters would never forgive the party for rehabilitating him after the scandals that brought him down in July, including illicit parties held during the pandemic and misconduct allegations against a lawmaker he promoted. Embracing such a polarizing figure, they say, would splinter the Tory ranks, perhaps irrevocably.

“Only a nation which was gripped by pessimistic despair and no longer believed that there could be a serious response to its unfolding tragedies would want to take refuge in the leadership of a clown,” Rory Stewart, who ran unsuccessfully against Mr. Johnson in 2019, wrote on Friday on Twitter. (NYT)

From sketch to finish, see the current way Graeme completes an editorial cartoon using an iPencil, the Procreate app, and a couple of cheats on an iPad Pro …