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Lines of Credit for Medical Students (Scotia is the best option)

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2 hours ago, Organeer said:

Can a Scotia advisor confirm whether or not we will get the points bonus on our credit card (e.g. if we spend $1k in 3 months or whatever case it is)

I have already earned and redeemed the points for my trip.

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4 hours ago, ScotiabankMedsAdvisor said:

I personally always set up the student account now as it allows unlimited e-transfers.

To make sure I'm reading this right: instead of the Scotia One, you give clients the SBAP chequing account and they keep that for the life of the LOC (i.e. even during residency)?

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13 minutes ago, ScotiabankMedsAdvisor said:

No they have no power to approve more.  The only way it would even be considered would be with a co- signer.

is it possible to connect with you to discuss options for LOC?

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27 minutes ago, LittleDaisy said:

Unfortunately yes!

This was the main thing I was worried about with the combination of increased tuition and higher interest rates. Raising the max provides more room but the underlying problem isn't going anywhere. You have to be very careful with the LOC. I am lucky - rate was rock stable low for years and I am getting close to the time I can hopefully repay. If you are starting out I am worried where this will lead. 

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1 hour ago, rmorelan said:

This was the main thing I was worried about with the combination of increased tuition and higher interest rates. Raising the max provides more room but the underlying problem isn't going anywhere. You have to be very careful with the LOC. I am lucky - rate was rock stable low for years and I am getting close to the time I can hopefully repay. If you are starting out I am worried where this will lead. 

Rates are still the lowest they've been in many years. With the economy doing so well recently its not a surprise the rates are coming up, however the trade disputes with the USA are probably going to dampen the rate of increase over the year so most likely it wont increase every quarter as it has recently

https://www.bankofcanada.ca/2018/07/fad-press-release-2018-07-11/

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33 minutes ago, Organomegaly said:

Rates are still the lowest they've been in many years. With the economy doing so well recently its not a surprise the rates are coming up, however the trade disputes with the USA are probably going to dampen the rate of increase over the year so most likely it wont increase every quarter as it has recently

https://www.bankofcanada.ca/2018/07/fad-press-release-2018-07-11/

ha, it is all about phrasing - I mean they are historically very low, and yet they are also they highest now than they have been in basically 10 years. How long is "many years"? :)

It is the combination of raising tuition and raising rates continuing forward that worries me. Every time they raise the ceiling it is a reminder to me that the overall cost is simply that much higher. 

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10 hours ago, rmorelan said:

It is the combination of raising tuition and raising rates continuing forward that worries me. Every time they raise the ceiling it is a reminder to me that the overall cost is simply that much higher. 

My friends in dent are super worried. Although they are practice-ready shortly after their dds/dmd, they wallow in a large amount of debt leading up to it.. and this is definitely not helping. 

"Our view is that the Bank of Canada will proceed with a series of rate hikes that will raise its overnight rate from 1.25% currently to 2.25% in the first half of 2019.

http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/house-jul2018.pdf 

This would mean the big banks' prime is going to be about 4.45%. The LOCs will be going at about 4.2% give or take.

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That's probably the highest it will go (4,45%). The stock markets can't keep doing so well forever, especially if a commercial war between the US and China does happen. From memory, the Conference Board projected that this is about as high as it will go and it should plateau at 4,20% around 2020 (3,95% for the LOCs).

Now, if there is an economic downturn (more and more likely), they won't be able to keep raising the interest rates and might have to lower them again.

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Supposedly, the yield curve is flattening - i.e. long term yields are similar to short term yields, which means that the market is "predicting" lower rates and high risk in the future, possibly linked to trade uncertainty.  This flattening is not usually a good sign and is linked to downturn.  In other words, I'd be surprised to see many more rate hikes.  

https://www.theglobeandmail.com/business/commentary/article-bank-of-canada-buys-itself-some-breathing-room-on-interest-rates/

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15 minutes ago, tere said:

Supposedly, the yield curve is flattening - i.e. long term yields are similar to short term yields, which means that the market is "predicting" lower rates and high risk in the future, possibly linked to trade uncertainty.  This flattening is not usually a good sign and is linked to downturn.  In other words, I'd be surprised to see many more rate hikes.  

https://www.theglobeandmail.com/business/commentary/article-bank-of-canada-buys-itself-some-breathing-room-on-interest-rates/

 

59 minutes ago, Snowmen said:

That's probably the highest it will go (4,45%). The stock markets can't keep doing so well forever, especially if a commercial war between the US and China does happen. From memory, the Conference Board projected that this is about as high as it will go and it should plateau at 4,20% around 2020 (3,95% for the LOCs).

Now, if there is an economic downturn (more and more likely), they won't be able to keep raising the interest rates and might have to lower them again.

It is a bit mixed. Rising tariffs could have a direct impact, pushing inflation higher while slowing the economy, a classic definition of stagflation. As tariffs of 10 or 25 per cent are added, that would tend to push prices up. Of course higher prices are the traditional indicator that the bank should raise interest rates. But a weakening economy tells them they should cut rates. The economy may be slowed, or it may speed up, but probably it will slow. But inflation is more likely to rise.

BoC is bound by a single, simple directive: Poloz's sole official task is to keep the rate of inflation at between one and three per cent. Other central banks, including the U.S. Fed, follow a dual mandate: price stability, meaning low inflation, and maximum, or full employment.

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So currently prime jumped up to 3.7% this morning and BoC also announced that by this fall (early October), prime will go up another 0.25%. Let's hope any one bank (RBC/Scotia etc) decides to give a better discount to subsidize the cost and we're not at too much of a loss. Otherwise, well who knows how high it can go :/ 

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1 hour ago, dantheman24 said:

So currently prime jumped up to 3.7% this morning and BoC also announced that by this fall (early October), prime will go up another 0.25%. Let's hope any one bank (RBC/Scotia etc) decides to give a better discount to subsidize the cost and we're not at too much of a loss. Otherwise, well who knows how high it can go :/ 

Where did they already announce the rate hike for the fall? I didn't see that anywhere...

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9 hours ago, la marzocco said:

 

It is a bit mixed. Rising tariffs could have a direct impact, pushing inflation higher while slowing the economy, a classic definition of stagflation. As tariffs of 10 or 25 per cent are added, that would tend to push prices up. Of course higher prices are the traditional indicator that the bank should raise interest rates. But a weakening economy tells them they should cut rates. The economy may be slowed, or it may speed up, but probably it will slow. But inflation is more likely to rise.

BoC is bound by a single, simple directive: Poloz's sole official task is to keep the rate of inflation at between one and three per cent. Other central banks, including the U.S. Fed, follow a dual mandate: price stability, meaning low inflation, and maximum, or full employment.

all this is true - but it is the uncertainty of things that makes things as always messy. No one really predicted the rates would be as low as they were for as long as they were - which is always my point, in the short term basically no one really has a solid clue what is going to happen. For all we know we could have a long term series of increases here. You can never say that publicly as it causes panic in the market ha, but we don't really know where things will end up (and sometimes with some people predicting things is actually the cause of the change - if Warren Buffet or the US reserve said tomorrow we are in a recession, we actually could be in short order ). 

Bottom line - expect both rates and tuition to increase for the next bit and probably is becoming more wise to keep a solid eye on where your LOC money is going. 

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41 minutes ago, Organomegaly said:

Where did they already announce the rate hike for the fall? I didn't see that anywhere...

Not announced - it is a part of their more likely predictions to come. Nothing formal or absolute yet until their rate announcement days - I guess there are 8 a year about 6 weeks apart so if it happens it will be one of those. 

Edited by rmorelan

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11 hours ago, la marzocco said:

My friends in dent are super worried. Although they are practice-ready shortly after their dds/dmd, they wallow in a large amount of debt leading up to it.. and this is definitely not helping. 

"Our view is that the Bank of Canada will proceed with a series of rate hikes that will raise its overnight rate from 1.25% currently to 2.25% in the first half of 2019.

http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/house-jul2018.pdf 

This would mean the big banks' prime is going to be about 4.45%. The LOCs will be going at about 4.2% give or take.

Yeah they are often worse off than meds even - in a slow squeeze

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