Someday, something will go wrong.

Somewhere in that first-time homebuyer's budget you need a line item that says "Emergency Fund". You may think that you don't need it; if something happens, you could take out a Line of Credit, right?


Every homeowner should have an Emergency Fund set aside. That's because someday, something will go wrong. Imagine the roof suddenly starts to leak. Or you discover mould in the basement. Or maybe you get hurt and need to take a month or two off work. What happens to your carefully designed budget then?


Having an emergency fund in place before you buy a home will give you peace of mind – knowing you have some financial buffer to tackle an unexpected financial obstacle.


So what about that Homeowner Line of Credit? Well your mortgage broker can provide some guidance; it's often a good idea to have a low-interest financial safeguard – before you need it. Just keep in mind that it is also borrowed money. If you use your Line, you'll need to budget carefully to pay it back.


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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.


The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.


The next rate-setting day is October 22nd.

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