Tuesday, May 6, 2014

Variable or fixed-rate — what’s the right mortgage for you?

If you’re in the market for a mortgage, one of the first — and most common — questions to ask yourself is whether you want a variable or fixed-rate mortgage.
Variable-rate mortgages, which have been around in Canada since the 1990s, are typically set at a pre-determined percentage above the prime rate and then fluctuate up and down with prime. The interest rate is generally a little lower than that of a fixed-rate mortgage, which offers the peace of mind of having a locked in rate for the duration of the mortgage term.
At a time when interest rates are expected to stay the same or decline, variable-rate mortgages are usually the more attractive option. But when faced with rising interest rates, locking in at a fixed rate can be a good way to reduce the risk of unexpected mortgage payment increases down the road.
These days, despite the fact that the Bank of Canada has held its overnight rate steady since September of 2010, more Canadians than ever say they would choose a fixed-rate mortgage if they had to make the decision today. A recent Nielsen poll found that 48 per cent of Canadians would now choose a fixed-rate mortgage, compared to 31 per cent who would opt for a variable-rate mortgage and 19 per cent who were undecided. That marks the fourth consecutive year where fixed-rate mortgages have been the most popular option.
Which mortgage is best for you? If you’re unsure, we can help. Visit North Winnipeg Credit Union today and we’ll sit down with you to work through your options.

The Four Per Cent Rule — is this common retirement benchmark right for you?

First coined 20 years ago, the Four Per Cent Rule has become an accepted rule of thumb in the retirement planning community.
The basic premise is this: If you withdraw four per cent of your retirement nest egg in your first year of retirement and then adjust that amount for inflation thereafter, you should have enough money to last you through your retirement years.
However in recent years, as the recession kept interest rates at near-record lows, the Four Per Cent Rule began to get called into question. Economists and financial planners started to question whether retirees would use up their savings too quickly in an environment where returns on their investments weren’t able to keep up with the withdrawal pace established under the Four Per Cent Rule.
Given that returns from mutual funds and the stock market are unpredictable, many retirement planning experts are beginning to suggest a more dynamic approach whereby retirees adjust their withdrawals on an annual basis, based on the performance of the markets.
And while the Four Per Cent Rule is still often advocated as a good starting point, other factors like your retirement age also impact its applicability. For example, those who retire at 50 need to plan for many more years of retirement, which may mean that withdrawing four per cent in the beginning is too high and perhaps they should start at three per cent. Conversely, those who retire at 65 may be able to afford to withdraw closer to five per cent right from the start.
The right retirement plan for you will depend on your own financial situation, your retirement goals and the steps you can take to get there. If you’d like help with your retirement plan, we’d be happy to discuss it with you. Call us at (204) 954-7450 or stop by one of our branches.

Be wary of this common ‘computer virus’ telephone scam

It’s the kind of scam that’s just a little too easy to fall for. Your telephone rings and the person on the end of the line explains they’re calling from the “Microsoft Windows Security Centre.” They’re calling to inform you that a serious virus has been detected on your computer.
For many people, even if they’re initially suspicious, the prospect of a harmful virus on their computer is enough to keep them on the line. And for many of us, the vagaries of the inner workings of a computer are enough to plant a seed of doubt. This, of course, is exactly what the fraudsters are counting on.
Once they’ve got your ear, they will then usually proceed to tell you there is a downloadable piece of software available to clean up your computer at a reasonable price. All they need is your credit card information and they’ll install it for you.
If you receive this kind of call, rest assured it is a scam. If you’re concerned about computer viruses, you can always purchase anti-virus software or have your computer checked by a reputable firm.

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