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What the Bank of Canada's rate Increase means for you – Mortgage Matters – Castanet.net

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As predicted the Bank of Canada increased its overnight lending rate by 0.25% last Wednesday.

The overnight rate determines what rate banks use to lend money to each other and any changes in this rate gets passed along to consumers by changing the rates on some of the banks’ lending products.

Variable rate mortgages, Home Equity Lines of Credit (HELOCs), unsecured lines of credit and student loans all have interest rates that are based on a lenders prime lending rate.

When this happens, it typically means that your rate is going to increase as well but not always increase by the same amount. It can also mean that not every lender will adjust their prime rate the same way—even now we have one of the major banks prime rate being 0.15% higher than everyone else’s on a variable rate mortgage.

By the time you read this, many lenders will have already announced an increase in their prime lending rate, so keep an eye out for further updates on your lenders’ prime rate and what date any rate changes will affect your mortgage rate.

The sky is not falling!

With today’s current variable rate discounts, even after the anticipated three or so increases of 0.25% this year, variable rates will still be below fixed rates. There would need to be approximately six increases of 0.25% to match the current fixed rates.

The highest the prime rate has been in the last 12 years was 3.95%, only 1.50% higher than today’s rate of 2.45%.

So, the best advice I can give if you currently have a variable rate mortgage is:

Don’t panic. Get some independent advice from your mortgage broker (not your lender), on what this increase means for you and your personal situation. Lenders and the media can create a panicked frenzy which might encourage you to think about locking in now in fear of rates going up even further. This could mean more profit for the lender, a longer commitment from you and difficultly breaking that mortgage later.

Make a plan. You need to do a financial benefit analysis based on what your short- and long-term plans are. If you are planning to move in the next few years, a variable rate might still be a better option with the lowest penalty. But, if you are in your forever home and have a key focus on being mortgage free by a specific timeline such as retirement or sooner, then a fixed term mortgage may be more suitable.

Everyone’s situation is different, so having a customized mortgage that meets your needs, and not the lender’s is always the way to go.

Do the math. A lender might be calling you to get you to lock in your amazing variable rate so don’t base your decision on fear. Review the numbers, look at the the facts and then decide what is right for you.

The banks love fixed rate mortgages and want you to lock-in your rate right now. The economists that you often see quoted in the news have been predicting a rate increase of 1.50% or higher for more than 10 years and they have been wrong. Historically variable rate mortgages holders have always “won” the rate game.

It’s important to note the prime rate, and in turn your variable rate mortgage and fixed-term mortgage rates, are impacted by two different sets of economic drivers. Therefore, increases in fixed rates don’t mean the same increase in prime rates and vice versa.

Please reach out if you would like an independent complimentary consultation to [email protected] or call 1-888-561-2679. You can also book a time for a chat here on my calendar at www.calendly.com/april-dunn

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With Twitter deal on hold, Musk says a lower sale price isn't 'out of the question’ – Engadget

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Billionaire Elon Musk is continuing to clash with Twitter over the accuracy of its bot count, and hinted today that he may try to renegotiate the $44 billion deal. Musk told attendees at a Miami conference that a deal at a lower price wasn’t “out of the question,” reported Bloomberg. Musk’s potential bid for a lower price is an unexpected twist, given that the SpaceX exec agreed to pay a 38 percent premium on Twitter when he reached a deal with the company’s board back in April.

“Currently what I’m being told is that there’s just no way to know the number of bots,” Musk said at the conference. “It’s like, as unknowable as the human soul.”

Musk’s potential bid for a lower price is an unexpected twist, given that the SpaceX exec agreed to pay a 38 percent premium on Twitter when he reached a deal with the company’s board back in April. 

Last Friday, Musk had announced that a buyout of Twitter was “temporarily on hold” due to concerns that the number of bots on the platform was much higher than the company estimated. The billionaire tweeted that his team would do an independent analysis on bot count and also tried to crowdsource bot estimates from his own followers. Musk was later reprimanded by Twitter’s legal team for revealing — in a tweet, of course — the company’s methodology for estimating the proportion of bot accounts across the platform.

Earlier today, Twitter CEO Parag Agrawal explained in a series of tweets that external estimates of bots are likely wrong, since the platform includes private data in its count.

“Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share),” tweeted Agrawal.

Musk responded to Agrawal’s explanation with a series of his own tweets, one that included a single poop emoji. Musk also suggested that Twitter verify whether users are human or not by calling them on the phone.

Tesla expert Dan Ives — an analyst at financial advisory firm Wedbush Securities — put the chances of Musk going through with the deal at under 50 percent. If Musk chooses to walk away, he’ll be subject to a $1 billion “kill fee”. But according to legal experts who spoke to The Washington Post, Twitter could sue Musk for the financial damages inflicted on the company due to the hasty reversal of the deal.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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Did Elon Musk violate Twitter's NDA agreement? Former SEC Chair Jay Clayton weighs in – CNBC Television

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Ukraine war: McDonald's to sell its Russian business – CTV News

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More than three decades after it became the first American fast food restaurant to open in the Soviet Union, McDonald’s said Monday that it has started the process of selling its business in Russia, another symbol of the country’s increasing isolation over its war in Ukraine.

The company, which has 850 restaurants in Russia that employ 62,000 people, pointed to the humanitarian crisis caused by the war, saying holding on to its business in Russia “is no longer tenable, nor is it consistent with McDonald’s values.”

The Chicago-based fast food giant said in early March that it was temporarily closing its stores in Russia but would continue to pay its employees. Without naming a prospective Russian buyer, McDonald’s said Monday that it would seek one to hire its workers and pay them until the sale closes.

CEO Chris Kempczinski said the “dedication and loyalty to McDonald’s” of employees and hundreds of Russian suppliers made it a difficult decision to leave.

“However, we have a commitment to our global community and must remain steadfast in our values,” Kempczinski said in a statement, “and our commitment to our values means that we can no longer keep the arches shining there.”

As it tries to sell its restaurants, McDonald’s said it plans to start removing golden arches and other symbols and signs with the company’s name. It said it will keep its trademarks in Russia.

Western companies have wrestled with extricating themselves from Russia, enduring the hit to their bottom lines from pausing or closing operations in the face of sanctions. Others have stayed in Russia at least partially, with some facing blowback.

French carmaker Renault said Monday that it would sell its majority stake in Russian car company Avtovaz and a factory in Moscow to the state — the first major nationalization of a foreign business since the war began.

For McDonald’s, its first restaurant in Russia opened in the middle of Moscow more than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of the easing of Cold War tensions between the United States and Soviet Union, which would collapse in 1991.

Now, the company’s exit is proving symbolic of a new era, analysts say.

“Its departure represents a new isolationism in Russia, which must now look inward for investment and consumer brand development,” said Neil Saunders, managing director of GlobalData, a corporate analytics company.

He said McDonald’s owns most of its restaurants in Russia, but because it won’t license its brand, the sale price likely won’t be close to the value of the business before the invasion. Russia and Ukraine combined accounted for about 9% of McDonald’s revenue and 3% of operating income before the war, Saunders said.

McDonald’s said it expects to record a charge against earnings of between US$1.2 billion and $1.4 billion over leaving Russia.

Its restaurants in Ukraine are closed, but the company said it is continuing to pay full salaries for its employees there.

McDonald’s has more than 39,000 locations across more than 100 countries. Most are owned by franchisees — only about 5% are owned and operated by the company.

McDonald’s said exiting Russia will not change its forecast of adding a net 1,300 restaurants this year, which will contribute about 1.5% to companywide sales growth.

Last month, McDonald’s reported that it earned $1.1 billion in the first quarter, down from more than $1.5 billion a year earlier. Revenue was nearly $5.7 billion.

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