Canada phases out the penny

Posted by under Mortgage News

The Federal Government of Canada announced the phasing out of the penny in the Economic Action Plan 2012 and today is the day that it goes into effect. It turns out that it cost more to produce the pennies then what they were monetarily worth and phasing them out will save Canadian taxpayers about $11 million a year.

What you need to know about the phasing out:

  • Pennies can still be used in cash transactions (for businesses that still choose to accept them)
  • No impact on cheque or electronic transactions
  • Rounding: Guidelines from the Federal Government outline that businesses can round up or down to the nearest five-cents
Rounding Guidelines from the Department of Finance Canada

If you have been saving your hard-earned money down to the last penny for your home, bring those pennies to the bank! Saving for a down payment can be a big deal but every cent counts. Zoocasa’s Home Ownership series have pointers that a homebuyer must know when preparing to buy a home.

Check out an excerpt from Homebuying Basics – How Much Can You Afford:

The first thing you need to do is to figure out your net worth. Your net worth is the amount left over once you’ve subtracted your total debts from your total assets. This can work as a guide to show you how much you can afford as a down payment.\ 

Prepare a budget: Detail all of your current monthly expenses and debt payments. Be as accurate as possible. Add everything up and then subtract this amount from your monthly take home amount. This will then give you a clear idea of how much you can truly afford for a mortgage payment each month. 

Click here to read more.

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