|  Should you rent or own your home? One of the main goals of the 2022 federal budget was to help Canadians save to buy a home in the country’s increasingly unaffordable housing market. But is home ownership right for everyone? Should you keep renting? Experts say it depends on your personal situation. Canadians have a "deeply ingrained view" of housing as a "good, stable investment," something everyone is "striving to buy," Paul Kershaw, founder of Generation Squeeze, told Global News. While home prices have risen over the past two decades in Canada — especially over the course of the COVID-19 pandemic — experts also say there are more financial factors to home ownership than resale prices. Property taxes, maintenance costs and more can be comparable to what renters are paying to their landlords on a monthly basis. Those factors can add a twist to the view that paying rent is “throwing money away” compared with building equity in a home, said Ben Felix, a portfolio manager and head of research at BWL Capital. If money that would go to a mortgage is put into the stock market instead, the returns can be just as fruitful if not more, he argues. Global News reporter Rachel Gilmore has more on what approach to property might be right for you.  Why did the Bank of Canada ‘forcefully’ hike rates? The Bank of Canada raised its benchmark interest rate by 50 basis points this week, its first half-point increase since May 2000. Why did the bank need to take this more aggressive step? Governor Tiff Macklem explained that unforeseen factors such as the war in Ukraine have ramped up inflation pressures, while the Canadian economy is outperforming due to high consumer demand and a strong jobs market. But even as the central bank moves quickly with interest rates, how long will it take for inflation to come down? It depends on which aspect of inflation you’re looking at, experts say, but in short: a while yet. The housing market had already started to show signs of cooling due to rising interest rate anticipation, said RBC senior economist Josh Nye. But the “full effect” of rates can take more than a year to filter through to the economy. However, the bank had to take the oversized step this week to rein in inflation expectation. The belief among business and consumers that inflation will be high can be something of a “self-fulfilling” cycle, Nye explained. Read more from Global News reporter Craig Lord about the effect of inflation expectation on rising prices and what path the central bank might take going forward.  Flair Airlines licence at risk If your summer travel plans have Flair Airlines flights in the itinerary, some experts say buying travel insurance is in your best interest. That’s because the Edmonton-based ultra-low-cost air carrier is currently the subject of an ownership review by the Canadian Transportation Agency, the country’s air travel watchdog. A preliminary review from the CTA found Flair might not be Canadian enough to operate its routes, which connect many smaller markets to other North American hubs. The ownership question comes due to the influence of its Miami-based investor, 777 Partners, which leases its aircraft to the company and might have “control in fact” over the air carrier, the CTA said in documents obtained by Global News. Flair has applied to the minister of transportation for an 18-month exemption. It said it’s working with the CTA to rectify the watchdog’s concerns. It has until May 3 to respond to those concerns and could have its licence suspended if the response is unsatisfactory. Read more about what that means for air passengers with travel booked on Flair. ________________________ – THE QUESTION – A followup from last week’s question about helping a child buy a home: “Further to the question asked by the mother that wanted to help her daughter purchase a new home, would the tax implications be the same if the mother guaranteed the mortgage, but did not own the property? Is it possible for her name to be on the mortgage, but not on the land title? Or would she be better off taking out a line of credit, gifting the funds to her daughter and paying off the line of credit over five years? It seems that ownership is not her intention; it’s helping her daughter. A lot of parents are trying to find a way to help their children buy homes. With rents being more costly than mortgage payments, it makes it difficult for young people to save a down payment.” — A Money123 reader “Lenders aim to reduce mortgage fraud by requiring that all parties on the mortgage are also on the land title. The only exception where guarantors are permitted is for a spouse living in the home. If the sole intention is to help a child, I would recommend a variable mortgage on mom's current home (the cost of borrowing on a variable rate mortgage is lower than a line of credit). Some parents choose to register their gift on the child's title as a non-repayable mortgage. This protects the family equity and benefits the parent and child if the child could find themselves in a future relationship that may end in separation (when the home is sold, the gift would be returned to the donor.)” -Nicole Hayes, mortgage broker, www.bcmortgageexpert.com
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