|  Looking for a raise? Here’s how to make your case If it seems like your salary isn’t stretching as far as it used to these days, you’re right. Statistics Canada reported this week that the annual rate of inflation rose to 6.7 per cent in March, the highest level in more than three decades. The good news, though, is that with Canada’s unemployment rate at record lows, the labour market is prime for workers to negotiate a salary bump from their employer. "There's probably never been a better time to ask for a raise," Michael French, national director at recruitment agency Robert Half, told Global News this week. Experts say it’s important to do your research and keep track of what the market rate for your position is these days, because it’s likely gone up in the tight labour market. You should also have a Plan B in mind in case you get rebuffed — look for more flexibility in your work hours or some extra vacation if a raise isn’t in the cards. Read more here to find out the best practices of when and how to ask for a pay bump.  What’s coming to Netflix? Netflix sent a shock through the market this week with news that it had lost subscribers this past quarter for the first time in more than a decade. As the company tries to retain its early lead in the streaming wars, experts say it’ll have to do more to differentiate itself from growing competition in the space. The company has publicly signalled plans to crack down on password sharing outside users’ households and its co-CEO even hinted that its exploring adding advertisements to the platform — a significant shift for the company that built its brand on being ad-free, analyst Carmi Levy tells Global News. Levy says that beyond changes to the platform and pricing, Netflix could expand its content offerings with more marquee shows a-la Bridgerton, international fare like Squid Game and even recently announced pivots into gaming. These moves are costly and come with their fair share of risk, but Netflix can’t afford to play it safe with Disney+, Amazon Prime and others nipping at its heels. "It has to very carefully thread the needle: spend just enough to keep people coming back for more, but not so much that you compromise your economic position," Levy explains. Read more here about how your Netflix viewing experience might change in the not-too-distant future.  Home prices rising despite efforts to cool the market Though interest rates are on the rise and governments of all sizes have housing affordability firmly in their sights, home prices are still set to rise before the end of the year, according to Royal LePage. The brokerage revised its 2022 forecasts this week and hiked its expectation for Canadian home prices. It now expects the aggregate sale price to land just shy of $900,000 by the end of the year, up 15 per cent year-over-year compared to initial estimate of 10.5 per cent. Canada Mortgage and Housing Corp. also said in a forecast this week that it expects price growth to remain elevated, though prices could ease off the blistering pace seen in 2021. A roaring start to the year and anticipation of a “strong seller’s market” this spring caught Royal LePage off guard, said CEO Phil Soper in an interview with Global News this week. Some experts claim the rising mortgage rates will be enough to prompt some declines in housing prices by the end of 2022; others pointed to the ongoing lack of supply in the market as a persistent factor inflating sale prices. Read more here from Global News reporter Craig Lord to learn when real estate experts expect prices to stabilize. ________________________ – THE QUESTION – “We are in our early 70s with an outstanding line of credit mortgage just under $70,000. There is $20,000 more that we can use if we need to. We pay interest only until the sale of the house but can pay it down if we choose to do so. Would it be best to remain with this mortgage or should we use our tax-free savings to pay it off? We also own land that could be sold to pay off the mortgage but would prefer not to unless there is a very good reason to sell.“ — A Money123 reader “Assuming you have enough cash flow to live on — after the home equity line of credit (HELOC) payment each month — you need to look at the best use of your savings. Today’s typical HELOC rate is about prime + 0.50 per cent, or 3.70 per cent. With a $70,000 balance, the interest-only payment on that is about $214 a month. The question is, if you had $70,000 invested in your TFSA, would it earn more than $214 a month? (i.e., more than 3.67 per cent annually) If so, can you rely on that TFSA return? Or is there material risk that your TFSA might earn less, or even lose money? If the risk-adjusted return from a TFSA is better than one’s HELOC rate, it usually doesn’t make sense to pay off a HELOC with TFSA funds. That’s especially true in periods of high inflation (like today) where incomes are generally rising faster than normal. When that happens, people can often benefit by: (A) deferring debt repayment to the future — when they can pay down debt with “deflated” dollars, and (B) redirecting cash that would have gone towards the debt, into suitable investments with higher rates of return. All that said, with the Bank of Canada now in urgent rate-hike mode, your HELOC rate is about to jump significantly. It could potentially rise as much as one to two percentage points or more in the next 12-18 months. If your HELOC rate climbed two percentage points to 5.70 per cent, you’d have to re-evaluate everything above. In that case, your $214 payment would jump to $329 a month. There’s also a question of your financial safety net. If you’re relying on that last $20,000 of credit, know that once you get up to 85-90 per cent HELOC utilization, there’s a small chance that if you’re not making principal payments, and the lender sees other risk factors (e.g., your home value plummets unexpectedly, your credit score drops significantly, etc.), they could potentially freeze borrowing in that account. In that case, if you rely on your HELOC, you’d be happy you had those TFSA funds in place to fall back on. If you got into a crunch, selling your property might be an option, assuming you’re willing to forego potential appreciation. Just remember that real estate is not as liquid when the market is falling. Of course, this is all just a quick and dirty analysis based on the limited information provided. For personalized investment advice, you’ll want to consult an experienced and licensed financial planner (CFP).“ -Robert McLister, mortgage strategist, mclister.com ___________________________ Want your money question answered by an expert? Get in touch! | 
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