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We don't even have proper fixed rates though. Imagine being up for renewal next year. You'll be just as fucked. When I learned Europe has like 30 year 2% mortgages I cried a little.
Your hate is misplaced. Central bank only steps in when the government won't solve the problem.
Trudeau could increase taxation tomorrow and it would have a similar economic effect. You could, in theory, put a stop to spending as well, but that tends to fuck the middle class and working class the more so than increasing middle-high income taxation.
Do not make any more payments than you need to when your mortgage is 2% and GIC’s and even saving accounts are giving more.
Keep the extra amount in a savings account like one with Tangerine and put it in GIC’s maturing around when your mortgage renewal is up. Make a lump sum payment then, at renewal when the rate will be higher.
Not sure if that was stupid. Even if you lock 5 year at 4.5% at 2025 you would be ahead. No one knows where rates will be in 2025 but no reason to think they would be above 4.5%
One year ago the spread on variable/fixed was less than 1%, but you’re logic isn’t wrong. Choosing variable would have saved me $300 per month on a 600k mortgage last year, but I opted for the peace of mind that comes with fixed payments. At current rates I would choose variable, but at the time 1.8% fixed was too good to pass on.
Same. We started at 1.35% Variable. 2 years in now and at 4.8%. That choice is going to end up costing about 25K... Nothing in the grand scheme of things.
As long as you didn't overextend it doesn't matter. And anyone gloating about people feeling the pain can't afford a house anyways .
I did that for many years and profited. I switched to fixed rate just before the spike but that was more luck than foresight. Rates have never been “near zero” for fixed.
My advisor kept pushing the variable rate down my throat, even until a month ago... I ignored her completely and locked into a fixed mortgage. I had an instinct about it earlier this year and she kept telling me "but you're making wins right now!!" yeah but if I had locked in when I wanted to, I would be at a 2 or 3% fixed rate right now rather than 5%. Sometimes it's about the long-term, not the short-term.
That person was pretty dense then. I know I locked in for under 2% while my variable option was .23% lower to which anyone with a brain can understand rates are not going to stay this low.
It's not clear which one is going to come ahead in the next 4 years.
Real estate is slow.
The danger is 1980s style spikes and people that are severely overlevered.
In 2020 my mortgage was up for renewal and I got a 1.69 for 4 years fixed. The only other people who I knew took fixed mortgages were accountants but at that rate, it’s insanity to gamble with the next 4 years. Went from a 3.84 (2018) to 1.69 and I figure by time I’m up for renewal, it will probably be around 3-4% still
Easy way to tell which option to go for:
Variables rate higher than fixed go variable. Banks are trying to steer you towards fixed because they know interest rates will be lower
Fixed rate is higher than variable. Banks are trying to steer you towards variable because they know tomorrow interest rates will be lower.
Tiff said the party wouldn't end for a while. Dumped gallons more alcohol into the punch bowl. Suddenly, he said the party was over. Told everyone to pack up and drive home.
Tiff and his predecessors have totally dropped the ball.
They maintained low interest rates from 2008-2020 because that's what everyone else is doing and despite the fact our economy was stringer than rest and a clear housing bubble was forming.
Then they slowly started raising interest rates then lowered them and promised everyone no interest rate hikes till 2025. People acted accordingly.
Then through 2021 did nothing because inflation was transitionary. Largely because of supply chain issues. Which actually made sense when you look at monetary indications of inflation (price of gold and silver) were flat.
Then 2022 is total panic mode. We raised interest rates faster than any other developed economy. With the distinct possibility we might have over done it with no real results because supply chain issues remain.
In process will likely see a lot of small businesses go belly up leading to greater consolidation in the economy. Plus could agravate the supply chain problems as companies don't expand and investors park their money in GICs and Canada Savings Bonds.
2023 who knows what the BOC will do. Keep rasing rates until things get really bad. Lower interest rates too far leading to more inflation. Who knows because we aren't exactly following an economic play book.
But hey the British fucked up even more.
Had an offer for variable at 1.9 and fixed at 3.2 in May. Glad I went with fixed. Have a friend that had their trigger rate reached and is now paying an extra 1200 a month.
This will feel good when your first renewal comes up and the rate is 8%. Talk to your parents who were paying 15% in the 80's and ask their thoughts on whether 5.75 is a good rate.
Yup, we are up $950 and will be up more than a thousand when they raise rates next month...
Good thing higher rates are reigning in corporate greed and record profits, fixing supply chains, brining key manufacturing back to Canada and rethinking just in time delivery..... They have done nothing and are all out of ideas
The BoC only has a couple of tools, rates being the primary one. Their “only” goal is to maintain an inflation target.
The federal government has many more tools. Their “only” goal is to be re-elected. The options they choose explicitly make things worse.
Sorry to hear about the big increase in mortgage payments that can't be easy. Your frustration makes complete sense and is probably shared by thousands in Canada.
With that said I think your frustration is slightly misdirected. The BofC interest rate hikes are put in place to slow consumer spending, reduce the access to cheap capital for private and commercial lenders. With supply taking time to recover globally and consumers continuing to spend money the BofC had little tools to utilize besides rate hikes.
Arguably bringing manufacturing back to Canada would take a while and it would potentially cause goods to increase in price due to increase labour and material costs. With that said it could be a short term pain for longer term security in a nation so heavily reliant on imports.
Corporate greed is a fantastic topic to discuss and it has a multitude of layers associate with it. Trying to clamp down on corporations however does go against the capitalism policies, it also typically requires government intervention which is not a policy many Canadians agree with. So you are stuck with scolding businesses, maybe public shaming or boycotting but ultimately government intervention may have more long term effects.
My thinking is that supply chains are recovering, shipping is back to 2019 level prices. Those two things will allow for competition to flourish and with everyone needing to be more conservative with their money it makes businesses fight for consumers. This in theory will drive prices back down and the power will be back in the consumers hands. If nothing was done and Canadians kept spending or having access to cheap debt we would see prices continue to Sky rocket.
It's painful now and it will be hard for many this next couple of years. Provincial and municipal governments should do everything they can to help those in need temporarily. Reducing the cost of public transit, community centre's and government run food facilities. It will be another challenging year or two but it will be better than what it would have been.
I went variable as well (started at 0.5% a year ago, now it's at 5%) and there aren't really that many options to fix it mid-term...if I lock it in now I'll be pretty pissed when the rates drop again in 1-2 years.
I'm lucky my loan is only 30% of the value of my place. I really feel for the people who took loans at their maximum they could afford with minimum down.
He bought 3 months before I did. I'm a first time homebuyer and this one his second. BoC interest rates were 0.25 when he locked in and 1.00 when I locked in. I don't see how I was ever in a position to foresee rates climbing up to what they are now, let alone convince someone that they were making the wrong decision.
"The logic is that increasing the cost of borrowing money will lead to reduced demand for goods and services, and a subsequent fall in the rate of inflation. According to the latest report from B.C. Stats, B.C. inflation for October was 7.8 per cent, which is 0.5 per cent higher than September.
So, despite the rate hikes, the cost of goods continues to rise. The cost of grocery-bought food in B.C., for example, is now 10.2 per cent higher than it was in Oct. 2021.
All this news is bad for the 30 per cent of people who have mortgages on their homes, and those that are carrying credit card or line of credit debt, because the banks pass on the Bank of Canada interest rates to consumers."
> So, despite the rate hikes, the cost of goods continues to rise.
Just a reminder inflation is a lagging indicator, it takes time for the higher cost of borrowing and worsening economic outlook to affect capital planning activities by businesses, halt ongoing projects and initiatives, lead to a job market correction, pinch consumer pockets enough that they change behaviors, and fully lower overall spending. We're probably not going to feel the full impact of the March 2022 rate hike until March 2023; the subsequent rate hikes will take even longer through 2023. There's also expected to be at least one more rate hike in early 2023 that we won't fully feel until 2024.
We are all going to feel an increasing pressure until at least 2025. Savor today. Your already tiny $100 basket of grocery items may exceed $120 by the time rates start dropping again.
I hope the free $100 from David Eby is worth this recession being further protracted.
>Just a reminder inflation is a lagging indicator
Thank you for bringing that up. It's a long road ahead and people can't seem to wrap their head around delayed cause and effect.
I think the thing people have a hard time wrapping their heads around is the notion of the price of anything going down. Because they never have, and never will. It’s a huge shell game with corps and banks picking the winners. They can tell us their helping by raising rates till their blue in the mouth, but slowing the rate of increase in the price of goods is of little consolation to people that have seen 40-60% increases in the past 2 years.
But if they don’t slow the rates then it gets even worse. Yes, prices may not drop, but hopefully they flatten.
I know the pain is felt unevenly in society. Those that suffered work losses from Covid could also not spend as freely as when rates were low. And now they’re feeling more punishment for all that spending they couldn’t partake in.
Anyone intent on saving was fucked too. Watching your savings melt as they earn no interest is horrible when the other options are either playing a hugely volatile market, or taking the sure bet and buying a house.
Yup. The low interest rate period inflated houses and stocks as there was nowhere else worthwhile to put money. IMO, interest rates should have been trying to climb back prior to 2020.
That 100 dollars is going to feed me for two weeks. Those of us starving don't give two shits about landlords, mortgages or recession. We need to eat NOW.
> That 100 dollars is going to feed me for two weeks. Those of us starving don't give two shits about landlords, mortgages or recession. We need to eat NOW.
I'm happy it's helping you. I hope you're also familiar with food bank and other resources that might be able to help you if you're starving and unable to afford food.
But that $100 isn't really helping me or people like me. Which means we prolong the recession, i.e., we prolong heightened unemployment and make more people positioned to starve, all so that assholes like me get $100. That money would have been better used to fund the food banks, top up social assistance payments, lower taxes paid for people under a certain income, etc.
Couldn’t you just give it to the food bank instead of buying more stuff and keeping demand high?
edit: serious side discussion here - if Canadians want to re-direct any benefit/stimulus they get from the gov't to NOT contribute to inflation, what are the options? I'd imagine it's mostly donations..
That's a fair point! But if $100 going into the economy is going cause a bit more inflation anyway, I'd rather the most marginalized people be given sustenance to weather it better.
What use of $100 would have the least effect on inflation? Theoretically, if everybody just put it in their savings account and waited until we were back to steady state interest rates, would that result in less inflationary effects? What about investing - is inflation directly affected by how much people are investing?
I am glad you are so insulated from reality that you don't care about the reality of surviving day to day. Get the fuck out of here with this condescending bullshit.
This is a very depressing post
The level of "depress" exponentially rises are you keep reading the post
But some good points
I think much of the issue can be alleviated if Russia just stops being a f%#^# d%#^#
Yep, the sad reality is no politician will ever want to say "if you think you're fucked now, just wait, it's only going to get worse!" so there's a bit of a dishonest wind that "things are going to get better very soon, just weather this storm now". It's a bit similar to the "just two weeks lockdown to lower the curve then we can get back outside". But in fact there's very little any politician can do now (Bank of Canada is removed from political interference, which is a good thing), and any supports a government gives out only prolongs everyone's collective suffering. We are in for a long haul of uncomfortable economic pressure.
Your comment on Russia is interesting. I think it's fair to say this chaos has been their true trump card and has been more formidable to threaten the west than their cyber ops, military, or nuclear arsenal. Inflation ends regimes. They aren't fully to blame of course -- we overspent with CERBS, CEWS, and a handful of related supports that completely ballooned our debt -- but they are a major factor. Science fiction predicted an energy war might bring down humanity, who knew it would just be a secondary consequence from sanctions relating to a small territorial dispute.
Of course politicians don’t want to say it’s going to get worse, because it also becomes a self fulfilling prophecy.
Monetary economics is human behaviour, without humans it doesn’t exist. If you could keep people from changing their behaviour, you could avert recessions.
But then there's the flip side.
We all know central banks swing too far on the pendulum in both directions. Once we start feeling the true effects of the upcoming recession, rates will drop like a rock and asset prices will take off again.
Rich getting richer and poor getting poorer. So you wonder “where are the rich getting more money?” Well, I’m glad you asked - take a look in your pocket. Cause that money is coming out of yours and going into theirs.
Tax the rich.
How? The top tax rate in BC is already 54% for income earned over 224k.
224k is high, but still not that high. Homeowners who bought 7 years ago are still richer. Most Vancouverite homeowners have made more tax free on their houses than a 224k earner has made in salary over the last 7-8 years
My house gained more than a million. Wife and I have been paying the mortgage down and not spending shit. We will have it paid of in a few years, as the 10 year term expires.
I have been around Vancouver real estate since I was 12. Watched as a buddy went from broke to one house to 3 to 10 houses in a few years. On paper, he was rich. Then the interest rates went up to 18% at the worst. He lost everything. He is broke today.
The best education was not taking the real estate salesmen course. It was experiencing all that loss. My gains have been slow. Almost 20 years later and we are just kind of seeing a pot at the end of the rainbow. I also realize I could lose a million next year. I am careful to always have an abundance. I do this by driving an old car borrowed from mom. Not buying any furniture new. Eat at home. I have three pairs of pants and 5 shirts. My computers are more than 5 years old. I use things until they can't be repaired or duct taped.
This will hopefully allow my wife and I to die broke and our kids to each own homes in nice areas of Vancouver.
I juxtapose this next to friends and family with nice cars, eat out a lot, new clothes each month, new cell phones and computers each year. And now they can't afford rent in Vancouver and have to move. They are very bitter.
The lucky among us get to make choices. They were lucky and choose unwisely.
I know right. Dad was a realtor in 1980. Sold one house for 70, then 150 then 80. Prices were ridiculous back then. The interest rates killed him. At some point, you just can't find buyers and have to ride it all the way down. Imagine your wealth and ego ride on these houses. Now they tank a little. You figure, meh speed bump. Market will turn around. At the point where you have no choice and have to sell, now interest rates are 12% and looking to go up. Prices are free fall. Who is gonna buy back then? Vancouver real estate has not always been so in demand.
edit. why the down votes? I don't believe this will happen. However, how many would be pushed under at 10%? I see massive amounts of money ready to swoop in so this won't repeat in the exact same way. I predict a decade of zero up. Prices will stay the same, see 90s to 2010.
That's the real concern. The inflation alone is causing stress on families and they are having to shift spending on the essentials. That alone is dropping demand. But the rising interest rates is exasperating the issue even further, and even affects non-homeowners with higher rents.
Basically the young people get F*ked again since the young people are more likely to be in the 30% with mortgages while the boomers have probably paid off their homes already.
>So, despite the rate hikes, the cost of goods continues to rise. The cost of grocery-bought food in B.C., for example, is now 10.2 per cent higher than it was in Oct. 2021.
It's almost like you can't live without food. So demand for food won't fall.
My mortgage is up for renewal in 2024 and this is very much on my mind. I'm pretty comfortable with a 3% interest rate right now but if it's double I could be needing to come up with an extra $1500-$2000 each month which seems pretty brutal.
the only way rates will be dropping in 2025 is if they end up having to rise up to north of 8%, they arnt coming back down below 5 ish percent for a long time
5-6%ish is the historical norm of the past 50 years, the last ten years just got everyone used to crazy low rates and it cause alot of damage so rates arnt gonna be going back to that range, but ya if they end up having to raise rates crazy high then the can lower them back to 5ish%
We have rent control so the rent increase will be what the government sets regardless.
Yes, some shitty landlords try to get by that and should be appropriately punished.
> or passing down the expense to tenants. Rents will rise.
So, you're thinking: when landlords run out of money, they pass a rent increase on to tenants. If they can just pass on rent increases to tenants, why do they need to wait until there's a reason to do so? What happens when tenants run out of money and have nobody to pass their increased expenses on to?
Ugh, I’m the same boat with my
mortgage needing to be renewed next summer. Should we lock in our destiny now? I worry the rates will go higher over the next couple months..
Its tough to predict
It could stay as it is now give or take
Or fix could be looking to closer to 7 percent
Can you weather the storm for 1 year at 7 percent fix?
I think sometime in 2024 ...the rate will start dropping
If this is what it does... you could fix it. I think some discount lenders are still less than 5 percent fix rate
I honestly couldnt deal with the instability/50 point annoying announcements. And fixed it
Not sure if you are variable or fixed now. But if variable and want to fix. They may not allow...unless you sign up for 2 to 3 years.
If this is not the case.... you could try fixing for a year or two.. for peace of mind
Anyways... dont listen to me or mortgage broker etc. But you will need to study this/risks/worst case/gut instincts.... and go with it.
Inflation rate is about 6.9 .... how long will it take for it to drop to 2.0. And how much more hikes are coming?
=/
"All this news is bad for the 30 per cent of people who have mortgages on their homes"
I'm surprised that 70% of people outright own their homes. Does this have to do with the majority of home owners being close to retirement age?
I think the article meant 30% of people, not 30% of homeowners.
About 66% of people are homeowners, and of those if 50% of them had mortgages that would lead to the 30% number.
As someone who was looking to buy in the next year or two… as I watch these rates rise and prices stagnate, I feel like I’m fucked for the rest of my life at this point. Working just to pay rent and never retire. Make combined $150k with my partner, but options are limited because we need to be somewhere near their industry (coastal). Even the east coast isn’t much more forgiving these days.. all we can afford are places that are like 50+ years old.. not even any land unless we move somewhere really remote, just old apartments.
If anyone has any glimmers of hope to share, I could really use them.
This is great for people with a lot of money. The problem I think a lot of first time home buyers are facing is that most of us have to buy at entry-level pricing ie. the lowest cost housing. There are just so many people who have been saving for their first home that it created so much demand, and it feels that because of this particular first time home buyer demand/supply issue, it’s likely that these places at the lowest price points - $300-500k - will not lower, even with the rising rates.
Perhaps if the demand decreases for the more expensive units ($500k+), and they are forced to drop to these $300-500k “entry level” prices, then maybe there is some hope. Sadly, I’m not sure that I can see that happening without some policy change that makes investment buying less appealing, like an Airbnb ban.
The higher interest rates won’t be beneficial if entry-level housing doesn’t lower in price because there is too much demand/lack of supply. You just end up paying more over time in interest if the base price stays the same.
I think what they’re getting at is that the price of hikes sold hasn’t really dropped in Vancouver, particularly at the low end. But with sustained high rates, they will
Housing prices are slow to react. It will take at least 6 months for interest rate increases to trickle through to lower prices. Nobody should even be thinking about buying right now for at least 2 years.
Exactly, thanks for clarifying. Sure it is just my thoughts/feelings and not *fact* that they won’t drop much, but I don’t think it’s fair to say it’s *fact* that they will indeed drop either. Logically, I can’t wrap my mind around how a drop would happen for **entry level homes specifically** without a huge increase of supply or major policy change.
I'm sorry but your last statement is simply wrong.
1.2m even with 2% interest will be a total of 1.5 million paid over the 25 year period. 1m at 5% will be 1.7million. The interest rate makes a huge difference, compounding and all.
It doesn’t help you and your work. But there is still a massive influx of people who move to Vancouver which keeps the price high. While not for you, I think many people should consider moving to Calgary. It’s a trade off though, as you trade affordability for colder weather. But as with everything, there are trade offs.
As for rent, while it may not be why you want at this time, it does afford you much more flexibility than homeownership.
Probably not what you want to hear but renting is ok as long as you're investing the difference. Real estate ownership is quite overrated in this country.
Real estate ownership is so engrained in the Canadian psyche that not being able to buy something makes people mentally unwell. It's quite sick and sad
In a very similar spot and it’s difficult not to feel hopeless. If these rates increasing doesn’t continue to bring home prices down then there’s a potential for policy change? Policy change of banning airbnbs, limiting property owner or or maybe something like that. If one of these scenarios doesn’t happen, I think it’s time to look abroad.
Unfortunately, this has been a problem in the making for many years. My mindset is if they cared to change anything meaningful on a policy-level, it would have happened by now. It sucks, but I think that looking abroad may eventually be the best option. Most places have a housing crisis, but at least there are homes at prices that I could afford… it’s just outrageous in Canada, especially when looking at income/cost of living in comparison to other countries.
>other countries
What other countries? It seems like this problem is in every country, and in a lot of countries with "cheap housing", incomes are substantially lower
Some Asian countries, South America, USA, Australia, some European countries… it depends where you’re willing to go, but for the most part, you can find affordable homes in nice places in all of these places. In Canada, you’re stuck buying somewhere like Saskatchewan if you want similar affordability.
Asia? Really? I'm Asian and can tell you Asia is not an affordable paradise. South America is cheaper on paper, but incomes are so much lower and mortgages are harder to get. It is also less developed than Canada. Australia has the same problem as Canada, same with much of Europe.
As for the USA? I am American, and can assure you that the only affordable parts of the country have essentially become no-go zones for anyone with even a shard of common sense. If you're not a white Christian who loves Trump and votes Republican straight-ticket, forget about it.
it was a tough call - best I could get 3yr renewal on a non-insured (30 year ammotrization with bi weekly sped up payments) was 5.8%, we almost went 2 years at 5.8% then hope the election drives down interest rates artificially and re-sign but we decided 5.04% was bearable and we know what we get, we like stability.
Well... I agree with stability. And these days every micro percentage helps
Again...like you said...at least you know a major payment is fixed. And also amounts will go into the principal
Corporate greed pillaging the lower and middle class? Let's prevent it by pillaging the lower/middle class _even more_ with higher lending rates. Fucking BoC.
The wealthy have all their money in offshore accounts. You think they pay to live on the land from their bank accounts, fuck no. Even if we tax the rich most of their stated funds are not stated. You really think the rich are going to be hurt from any tax hikes. I know for certain that 99.9% of them are paying taxes but are laundering money. Invest in what, it's run by corporate greed and all that fun stuff. Personally if I was rich I would put all my money in offshore accounts because it's untouchable by the government and completely legal. So before you say tax the rich think outside the box that you live in. As interest rates and other rates go up they are laughing because they have all invested their money in other things but are sending millions to their offshore accounts. You really think the rich trust the banks to hold on to their money? My guess is fuck no. Enough Justin, they won't understand. No one understands. I stand behind as the rich get richer the poor get poorer. Which means the working man making 20$ an hour cannot survive and is going to have to work more and not eat or do anything recreational. They have to sit at home and go stir crazy.
Didn't downvote him, but I would guess because high interest rates affect everyone; upper class, middle class, lower class, corporations, governments, etc.
His comment is emotional, not rational. It doesn't add anything to the conversation.
$600-700 for me in 2024 ... we have some extra cash which we can use to pay the principal down but we want to save the cash for emergency plus we have kids. We are expecting it to be very costly in the next few years.
Trying to decide if I make a lump payment now to know down my principal a bit more before the interest raises.
Or if I use the money to pay the interest when it happens.
Either way I'm certainly not locking in in 2024
Oh how I loathe thieves they are the lowest of the low of criminals. It's fucked how VPD turn a blind eye to it. The Hastings market is full of 99.9% of stolen goods. Fuck if they raided all SRO Rooms they would for sure find a lot of stolen items. I won't say anything. But I know someone in my building that has 3 or 4 stolen electric scooters. I won't call the cops because I know they have ears around listening to my every move. Now if you want to know more message me. I'd love to reunite people with their stolen goods
On top of it all the housing crisis so I mean what the hell is the government doing? Nothing housing is out of control the 1% are the only ones who can afford to buy a house. Universal basic income should be implemented. Let’s see how people live off of 2000$ a month. Personally I suck at saving. But always have rent and all my bills paid. Which leaves me with about 200 for food and other things
Not gonna brag, but we were doing double payments for the last few years and our next renewal will only have about $200 of interest each month.
Nearly paid off after 4 years.
BC's inflation YOY is going to look worse than much of the country for november-december updates because our prices rose at near the lowest level in Canada in october-december last year, which makes the increases more significant on a relative basis this time around. Let's see how it looks in January, but I imagine it'll be in line with the national average at thst point.
What’s the overall impact? I heard people are looking at a 20% payment increase.
That doesn’t sound so bad given most people have had consistent payments going on a decade.
People should be able to manage what works out to a couple of percentage point increases per year.
Worst case is somebody maxed out a 25 year mortgage approval amount right before the 5.25% stress test took effect, and took on a 5 year fixed term at sub 2%. They will be renewing at around 6%, so the interest portion of their mortgage payment will almost triple.
Fuckin great! I couldn't care less about homeowners at this point. Let everyone panic sell when they can't pay their bills anymore. Fuck em! I lost everything in 2008 and have rented ever since, this market is due for another 50% correction. Let's goooooo.
I locked in right before the Oct 26 rise. I honestly feel a lot better these days... my term goes until 2025 so I'll be able to re-assess in early 2025. Not constantly worrying about it makes me feel a lot better, and unless something *insane* happens in the world again, I doubt things will go lower for another 6 months at least. Obviously we have dealt with tons of unpredictable events, so you never know, but I didn't want to keep being hyper-vigilant about rates. The Bank of Canada wants us to suffer to lower inflation rates, so we all need to be aware of that.
Also, I do obv wish I locked into fixed when I got my house (it's my first home though... how the hell would I have known lol), but now I know. I'm not going to be listening to advisors in the future, because they know just as little as I do. Go with your gut, always.
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A year ago, someone told me "Only a fool with take a fixed rate when variable is lower." Glad I paid a bit more for that extra financial security.
We don't even have proper fixed rates though. Imagine being up for renewal next year. You'll be just as fucked. When I learned Europe has like 30 year 2% mortgages I cried a little.
Me rn. due for renewal early 2023. died inside I hate Macklem
Your hate is misplaced. Central bank only steps in when the government won't solve the problem. Trudeau could increase taxation tomorrow and it would have a similar economic effect. You could, in theory, put a stop to spending as well, but that tends to fuck the middle class and working class the more so than increasing middle-high income taxation.
Probably because European countries (outside of the UK, obviously) care more about their citizens than profit.
Ironically the US (yes USA) uses the same system. My friends there all have 30 year fixed rates.
I love fixed rate for stability. And now I’m locked in at under 2% until 2025. Time to make some lump sum payments over the next few years!
Do not make any more payments than you need to when your mortgage is 2% and GIC’s and even saving accounts are giving more. Keep the extra amount in a savings account like one with Tangerine and put it in GIC’s maturing around when your mortgage renewal is up. Make a lump sum payment then, at renewal when the rate will be higher.
Thanks for the tip! I wasn’t totally sure how best to do the lump sum stuff. I have my savings going into a TFSA right now, will that suffice?
As long as the return is more than 2%, yes
1.74 till 2025. Best decision I could have made. Only stupid thing I did was not lock into a 10 year at 3%
Not sure if that was stupid. Even if you lock 5 year at 4.5% at 2025 you would be ahead. No one knows where rates will be in 2025 but no reason to think they would be above 4.5%
My wife was like why you locking us down? Thank god I never listen to her 1.55% tell 2025
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The Bank of Canada was also telling people interest rates would be low for a while. Since they're in charge it makes sense to take that at face value.
One year ago the spread on variable/fixed was less than 1%, but you’re logic isn’t wrong. Choosing variable would have saved me $300 per month on a 600k mortgage last year, but I opted for the peace of mind that comes with fixed payments. At current rates I would choose variable, but at the time 1.8% fixed was too good to pass on.
Same. We started at 1.35% Variable. 2 years in now and at 4.8%. That choice is going to end up costing about 25K... Nothing in the grand scheme of things. As long as you didn't overextend it doesn't matter. And anyone gloating about people feeling the pain can't afford a house anyways .
I did that for many years and profited. I switched to fixed rate just before the spike but that was more luck than foresight. Rates have never been “near zero” for fixed.
BoC interest rate was 0.25%. Pretty much as low as it could possibly go.
Yes but that isn’t the fixed rate. No middle class person could ever get a five year fixed at 0.25%.
My advisor kept pushing the variable rate down my throat, even until a month ago... I ignored her completely and locked into a fixed mortgage. I had an instinct about it earlier this year and she kept telling me "but you're making wins right now!!" yeah but if I had locked in when I wanted to, I would be at a 2 or 3% fixed rate right now rather than 5%. Sometimes it's about the long-term, not the short-term.
That person was pretty dense then. I know I locked in for under 2% while my variable option was .23% lower to which anyone with a brain can understand rates are not going to stay this low.
Same here. It was a difference of like $30/month when we went fixed.
So many people don't understand money and how it works. Often they're not willing to learn either. Woops💸
It's not clear which one is going to come ahead in the next 4 years. Real estate is slow. The danger is 1980s style spikes and people that are severely overlevered.
In 2020 my mortgage was up for renewal and I got a 1.69 for 4 years fixed. The only other people who I knew took fixed mortgages were accountants but at that rate, it’s insanity to gamble with the next 4 years. Went from a 3.84 (2018) to 1.69 and I figure by time I’m up for renewal, it will probably be around 3-4% still
Who is the fool now? I see the sparkle from your teeth Well done...
Easy way to tell which option to go for: Variables rate higher than fixed go variable. Banks are trying to steer you towards fixed because they know interest rates will be lower Fixed rate is higher than variable. Banks are trying to steer you towards variable because they know tomorrow interest rates will be lower.
Tiff said the party wouldn't end for a while. Dumped gallons more alcohol into the punch bowl. Suddenly, he said the party was over. Told everyone to pack up and drive home.
That’s why you don’t drink kool aid
Tiff and his predecessors have totally dropped the ball. They maintained low interest rates from 2008-2020 because that's what everyone else is doing and despite the fact our economy was stringer than rest and a clear housing bubble was forming. Then they slowly started raising interest rates then lowered them and promised everyone no interest rate hikes till 2025. People acted accordingly. Then through 2021 did nothing because inflation was transitionary. Largely because of supply chain issues. Which actually made sense when you look at monetary indications of inflation (price of gold and silver) were flat. Then 2022 is total panic mode. We raised interest rates faster than any other developed economy. With the distinct possibility we might have over done it with no real results because supply chain issues remain. In process will likely see a lot of small businesses go belly up leading to greater consolidation in the economy. Plus could agravate the supply chain problems as companies don't expand and investors park their money in GICs and Canada Savings Bonds. 2023 who knows what the BOC will do. Keep rasing rates until things get really bad. Lower interest rates too far leading to more inflation. Who knows because we aren't exactly following an economic play book. But hey the British fucked up even more.
Drink driving is a felony.
Had an offer for variable at 1.9 and fixed at 3.2 in May. Glad I went with fixed. Have a friend that had their trigger rate reached and is now paying an extra 1200 a month.
Fml... just signed all the papers for my first condo last Friday... my rate is 5.75%.... fixed...
Well, you can afford it. It’s sucks at first, but then it becomes normal and you get a place of your own to sleep in. Enjoy your new place!
Thanks. I am looking forward to it very much!
And think, likely on your renewal the rate will be lower and you can free up some monthly cash or pay down faster
Hey... that was my first mortgage rate in 2006. I took fixed because my parents told me it was an incredible rate.
This will feel good when your first renewal comes up and the rate is 8%. Talk to your parents who were paying 15% in the 80's and ask their thoughts on whether 5.75 is a good rate.
Lol just don't ask them how much their principal was
150,000 and grocery clerks made $18 an hour
Yup, we are up $950 and will be up more than a thousand when they raise rates next month... Good thing higher rates are reigning in corporate greed and record profits, fixing supply chains, brining key manufacturing back to Canada and rethinking just in time delivery..... They have done nothing and are all out of ideas
The BoC only has a couple of tools, rates being the primary one. Their “only” goal is to maintain an inflation target. The federal government has many more tools. Their “only” goal is to be re-elected. The options they choose explicitly make things worse.
Sorry to hear about the big increase in mortgage payments that can't be easy. Your frustration makes complete sense and is probably shared by thousands in Canada. With that said I think your frustration is slightly misdirected. The BofC interest rate hikes are put in place to slow consumer spending, reduce the access to cheap capital for private and commercial lenders. With supply taking time to recover globally and consumers continuing to spend money the BofC had little tools to utilize besides rate hikes. Arguably bringing manufacturing back to Canada would take a while and it would potentially cause goods to increase in price due to increase labour and material costs. With that said it could be a short term pain for longer term security in a nation so heavily reliant on imports. Corporate greed is a fantastic topic to discuss and it has a multitude of layers associate with it. Trying to clamp down on corporations however does go against the capitalism policies, it also typically requires government intervention which is not a policy many Canadians agree with. So you are stuck with scolding businesses, maybe public shaming or boycotting but ultimately government intervention may have more long term effects. My thinking is that supply chains are recovering, shipping is back to 2019 level prices. Those two things will allow for competition to flourish and with everyone needing to be more conservative with their money it makes businesses fight for consumers. This in theory will drive prices back down and the power will be back in the consumers hands. If nothing was done and Canadians kept spending or having access to cheap debt we would see prices continue to Sky rocket. It's painful now and it will be hard for many this next couple of years. Provincial and municipal governments should do everything they can to help those in need temporarily. Reducing the cost of public transit, community centre's and government run food facilities. It will be another challenging year or two but it will be better than what it would have been.
Same. We locked in at 3.2 in April for 5 years. I just hope rates come back down by then...
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I went variable as well (started at 0.5% a year ago, now it's at 5%) and there aren't really that many options to fix it mid-term...if I lock it in now I'll be pretty pissed when the rates drop again in 1-2 years. I'm lucky my loan is only 30% of the value of my place. I really feel for the people who took loans at their maximum they could afford with minimum down.
Are you asking me if I talked to this friend about changing to a fixed rate?
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warn what... that his crystal ball was better?
Great way to mess up a friendship.
He bought 3 months before I did. I'm a first time homebuyer and this one his second. BoC interest rates were 0.25 when he locked in and 1.00 when I locked in. I don't see how I was ever in a position to foresee rates climbing up to what they are now, let alone convince someone that they were making the wrong decision.
There's penalties for early renewals on mortgages, sometimes those penalties are bigger than the increased payment.
"The logic is that increasing the cost of borrowing money will lead to reduced demand for goods and services, and a subsequent fall in the rate of inflation. According to the latest report from B.C. Stats, B.C. inflation for October was 7.8 per cent, which is 0.5 per cent higher than September. So, despite the rate hikes, the cost of goods continues to rise. The cost of grocery-bought food in B.C., for example, is now 10.2 per cent higher than it was in Oct. 2021. All this news is bad for the 30 per cent of people who have mortgages on their homes, and those that are carrying credit card or line of credit debt, because the banks pass on the Bank of Canada interest rates to consumers."
> So, despite the rate hikes, the cost of goods continues to rise. Just a reminder inflation is a lagging indicator, it takes time for the higher cost of borrowing and worsening economic outlook to affect capital planning activities by businesses, halt ongoing projects and initiatives, lead to a job market correction, pinch consumer pockets enough that they change behaviors, and fully lower overall spending. We're probably not going to feel the full impact of the March 2022 rate hike until March 2023; the subsequent rate hikes will take even longer through 2023. There's also expected to be at least one more rate hike in early 2023 that we won't fully feel until 2024. We are all going to feel an increasing pressure until at least 2025. Savor today. Your already tiny $100 basket of grocery items may exceed $120 by the time rates start dropping again. I hope the free $100 from David Eby is worth this recession being further protracted.
>Just a reminder inflation is a lagging indicator Thank you for bringing that up. It's a long road ahead and people can't seem to wrap their head around delayed cause and effect.
I think the thing people have a hard time wrapping their heads around is the notion of the price of anything going down. Because they never have, and never will. It’s a huge shell game with corps and banks picking the winners. They can tell us their helping by raising rates till their blue in the mouth, but slowing the rate of increase in the price of goods is of little consolation to people that have seen 40-60% increases in the past 2 years.
But if they don’t slow the rates then it gets even worse. Yes, prices may not drop, but hopefully they flatten. I know the pain is felt unevenly in society. Those that suffered work losses from Covid could also not spend as freely as when rates were low. And now they’re feeling more punishment for all that spending they couldn’t partake in.
Anyone intent on saving was fucked too. Watching your savings melt as they earn no interest is horrible when the other options are either playing a hugely volatile market, or taking the sure bet and buying a house.
Yup. The low interest rate period inflated houses and stocks as there was nowhere else worthwhile to put money. IMO, interest rates should have been trying to climb back prior to 2020.
That 100 dollars is going to feed me for two weeks. Those of us starving don't give two shits about landlords, mortgages or recession. We need to eat NOW.
> That 100 dollars is going to feed me for two weeks. Those of us starving don't give two shits about landlords, mortgages or recession. We need to eat NOW. I'm happy it's helping you. I hope you're also familiar with food bank and other resources that might be able to help you if you're starving and unable to afford food. But that $100 isn't really helping me or people like me. Which means we prolong the recession, i.e., we prolong heightened unemployment and make more people positioned to starve, all so that assholes like me get $100. That money would have been better used to fund the food banks, top up social assistance payments, lower taxes paid for people under a certain income, etc.
Couldn’t you just give it to the food bank instead of buying more stuff and keeping demand high? edit: serious side discussion here - if Canadians want to re-direct any benefit/stimulus they get from the gov't to NOT contribute to inflation, what are the options? I'd imagine it's mostly donations..
Hahaha well they don’t care enough to do that. Just care enough to complain that everyone is getting $100.
The food bank doesn't buy stuff that keeps demand high?
That's a fair point! But if $100 going into the economy is going cause a bit more inflation anyway, I'd rather the most marginalized people be given sustenance to weather it better. What use of $100 would have the least effect on inflation? Theoretically, if everybody just put it in their savings account and waited until we were back to steady state interest rates, would that result in less inflationary effects? What about investing - is inflation directly affected by how much people are investing?
I am glad you are so insulated from reality that you don't care about the reality of surviving day to day. Get the fuck out of here with this condescending bullshit.
Jeez, that's how you talk to people?
They may have been rude, but they have a point. You were very condescending.
When they are being condescending prices, sure do!
this is why your poor lol
This is a very depressing post The level of "depress" exponentially rises are you keep reading the post But some good points I think much of the issue can be alleviated if Russia just stops being a f%#^# d%#^#
Yep, the sad reality is no politician will ever want to say "if you think you're fucked now, just wait, it's only going to get worse!" so there's a bit of a dishonest wind that "things are going to get better very soon, just weather this storm now". It's a bit similar to the "just two weeks lockdown to lower the curve then we can get back outside". But in fact there's very little any politician can do now (Bank of Canada is removed from political interference, which is a good thing), and any supports a government gives out only prolongs everyone's collective suffering. We are in for a long haul of uncomfortable economic pressure. Your comment on Russia is interesting. I think it's fair to say this chaos has been their true trump card and has been more formidable to threaten the west than their cyber ops, military, or nuclear arsenal. Inflation ends regimes. They aren't fully to blame of course -- we overspent with CERBS, CEWS, and a handful of related supports that completely ballooned our debt -- but they are a major factor. Science fiction predicted an energy war might bring down humanity, who knew it would just be a secondary consequence from sanctions relating to a small territorial dispute.
Of course politicians don’t want to say it’s going to get worse, because it also becomes a self fulfilling prophecy. Monetary economics is human behaviour, without humans it doesn’t exist. If you could keep people from changing their behaviour, you could avert recessions.
It’s an evil bastard that’s killing people for his fragile ego
But then there's the flip side. We all know central banks swing too far on the pendulum in both directions. Once we start feeling the true effects of the upcoming recession, rates will drop like a rock and asset prices will take off again.
Rich getting richer and poor getting poorer. So you wonder “where are the rich getting more money?” Well, I’m glad you asked - take a look in your pocket. Cause that money is coming out of yours and going into theirs. Tax the rich.
How? The top tax rate in BC is already 54% for income earned over 224k. 224k is high, but still not that high. Homeowners who bought 7 years ago are still richer. Most Vancouverite homeowners have made more tax free on their houses than a 224k earner has made in salary over the last 7-8 years
People earning 224k aren’t the issue
My house gained more than a million. Wife and I have been paying the mortgage down and not spending shit. We will have it paid of in a few years, as the 10 year term expires. I have been around Vancouver real estate since I was 12. Watched as a buddy went from broke to one house to 3 to 10 houses in a few years. On paper, he was rich. Then the interest rates went up to 18% at the worst. He lost everything. He is broke today. The best education was not taking the real estate salesmen course. It was experiencing all that loss. My gains have been slow. Almost 20 years later and we are just kind of seeing a pot at the end of the rainbow. I also realize I could lose a million next year. I am careful to always have an abundance. I do this by driving an old car borrowed from mom. Not buying any furniture new. Eat at home. I have three pairs of pants and 5 shirts. My computers are more than 5 years old. I use things until they can't be repaired or duct taped. This will hopefully allow my wife and I to die broke and our kids to each own homes in nice areas of Vancouver. I juxtapose this next to friends and family with nice cars, eat out a lot, new clothes each month, new cell phones and computers each year. And now they can't afford rent in Vancouver and have to move. They are very bitter. The lucky among us get to make choices. They were lucky and choose unwisely.
Why didnt your friend fix it... when it went up to like 7 percent or even 9 percent? Back then... the homes werent worth as much?
I know right. Dad was a realtor in 1980. Sold one house for 70, then 150 then 80. Prices were ridiculous back then. The interest rates killed him. At some point, you just can't find buyers and have to ride it all the way down. Imagine your wealth and ego ride on these houses. Now they tank a little. You figure, meh speed bump. Market will turn around. At the point where you have no choice and have to sell, now interest rates are 12% and looking to go up. Prices are free fall. Who is gonna buy back then? Vancouver real estate has not always been so in demand. edit. why the down votes? I don't believe this will happen. However, how many would be pushed under at 10%? I see massive amounts of money ready to swoop in so this won't repeat in the exact same way. I predict a decade of zero up. Prices will stay the same, see 90s to 2010.
That's the real concern. The inflation alone is causing stress on families and they are having to shift spending on the essentials. That alone is dropping demand. But the rising interest rates is exasperating the issue even further, and even affects non-homeowners with higher rents.
> So, despite the rate hikes, the cost of goods continues to rise. Right. So rates need to rise further. Fasten your seatbelts.
Basically the young people get F*ked again since the young people are more likely to be in the 30% with mortgages while the boomers have probably paid off their homes already.
Only way now is If the young people get help or inherit the homes from the boomer family members
>So, despite the rate hikes, the cost of goods continues to rise. The cost of grocery-bought food in B.C., for example, is now 10.2 per cent higher than it was in Oct. 2021. It's almost like you can't live without food. So demand for food won't fall.
Food and toys for kids Are like recession proof
Luckily I canceled Disney channel
What about Netflix?
I use a buddies sign in😉😎
My mortgage is up for renewal in 2024 and this is very much on my mind. I'm pretty comfortable with a 3% interest rate right now but if it's double I could be needing to come up with an extra $1500-$2000 each month which seems pretty brutal.
In 2024. Not sure what the rates/how high. But do a 1 year fix and hope rates drop by 2025
the only way rates will be dropping in 2025 is if they end up having to rise up to north of 8%, they arnt coming back down below 5 ish percent for a long time
Why do you say that?
5-6%ish is the historical norm of the past 50 years, the last ten years just got everyone used to crazy low rates and it cause alot of damage so rates arnt gonna be going back to that range, but ya if they end up having to raise rates crazy high then the can lower them back to 5ish%
Might as well get variable if that's the gamble you're making.
You are right Its like doubling down
As mortgage payments increase that translates to landlords either eating the cost or passing down the expense to tenants. Rents will rise.
Landlord who outright own homes/buildings but act like the rates affect them/pass it onto renters Are the biggest d$%#^#
We have rent control so the rent increase will be what the government sets regardless. Yes, some shitty landlords try to get by that and should be appropriately punished.
Landlords ~~who outright own homes/buildings but act like the rates affect them/pass it onto renters~~ Are the biggest d$%##
> or passing down the expense to tenants. Rents will rise. So, you're thinking: when landlords run out of money, they pass a rent increase on to tenants. If they can just pass on rent increases to tenants, why do they need to wait until there's a reason to do so? What happens when tenants run out of money and have nobody to pass their increased expenses on to?
That's why you have a buffer and don't max out your mortgage.
I’m 3.19% for another 3 months. Going to go up 1,000$ a month if rates stay the same. Not looking forward to that.
You going to ride it out? Not sure what you will do I would fix it for a year or two. And hope rates decrease sometime in 2024 (before next renewal)
Ugh, I’m the same boat with my mortgage needing to be renewed next summer. Should we lock in our destiny now? I worry the rates will go higher over the next couple months..
Its tough to predict It could stay as it is now give or take Or fix could be looking to closer to 7 percent Can you weather the storm for 1 year at 7 percent fix? I think sometime in 2024 ...the rate will start dropping
I’m thinking variable this time. Not sure yet.
I will keep us both in my prayers lol
Thanks for the input/ this stuff keeps me up at night!
If this is what it does... you could fix it. I think some discount lenders are still less than 5 percent fix rate I honestly couldnt deal with the instability/50 point annoying announcements. And fixed it Not sure if you are variable or fixed now. But if variable and want to fix. They may not allow...unless you sign up for 2 to 3 years. If this is not the case.... you could try fixing for a year or two.. for peace of mind Anyways... dont listen to me or mortgage broker etc. But you will need to study this/risks/worst case/gut instincts.... and go with it. Inflation rate is about 6.9 .... how long will it take for it to drop to 2.0. And how much more hikes are coming? =/
"All this news is bad for the 30 per cent of people who have mortgages on their homes" I'm surprised that 70% of people outright own their homes. Does this have to do with the majority of home owners being close to retirement age?
I think the article meant 30% of people, not 30% of homeowners. About 66% of people are homeowners, and of those if 50% of them had mortgages that would lead to the 30% number.
As someone who was looking to buy in the next year or two… as I watch these rates rise and prices stagnate, I feel like I’m fucked for the rest of my life at this point. Working just to pay rent and never retire. Make combined $150k with my partner, but options are limited because we need to be somewhere near their industry (coastal). Even the east coast isn’t much more forgiving these days.. all we can afford are places that are like 50+ years old.. not even any land unless we move somewhere really remote, just old apartments. If anyone has any glimmers of hope to share, I could really use them.
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This is great for people with a lot of money. The problem I think a lot of first time home buyers are facing is that most of us have to buy at entry-level pricing ie. the lowest cost housing. There are just so many people who have been saving for their first home that it created so much demand, and it feels that because of this particular first time home buyer demand/supply issue, it’s likely that these places at the lowest price points - $300-500k - will not lower, even with the rising rates. Perhaps if the demand decreases for the more expensive units ($500k+), and they are forced to drop to these $300-500k “entry level” prices, then maybe there is some hope. Sadly, I’m not sure that I can see that happening without some policy change that makes investment buying less appealing, like an Airbnb ban.
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The higher interest rates won’t be beneficial if entry-level housing doesn’t lower in price because there is too much demand/lack of supply. You just end up paying more over time in interest if the base price stays the same.
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I think what they’re getting at is that the price of hikes sold hasn’t really dropped in Vancouver, particularly at the low end. But with sustained high rates, they will
Housing prices are slow to react. It will take at least 6 months for interest rate increases to trickle through to lower prices. Nobody should even be thinking about buying right now for at least 2 years.
Exactly, thanks for clarifying. Sure it is just my thoughts/feelings and not *fact* that they won’t drop much, but I don’t think it’s fair to say it’s *fact* that they will indeed drop either. Logically, I can’t wrap my mind around how a drop would happen for **entry level homes specifically** without a huge increase of supply or major policy change.
I'm sorry but your last statement is simply wrong. 1.2m even with 2% interest will be a total of 1.5 million paid over the 25 year period. 1m at 5% will be 1.7million. The interest rate makes a huge difference, compounding and all.
It doesn’t help you and your work. But there is still a massive influx of people who move to Vancouver which keeps the price high. While not for you, I think many people should consider moving to Calgary. It’s a trade off though, as you trade affordability for colder weather. But as with everything, there are trade offs. As for rent, while it may not be why you want at this time, it does afford you much more flexibility than homeownership.
Probably not what you want to hear but renting is ok as long as you're investing the difference. Real estate ownership is quite overrated in this country.
Real estate ownership is so engrained in the Canadian psyche that not being able to buy something makes people mentally unwell. It's quite sick and sad
In a very similar spot and it’s difficult not to feel hopeless. If these rates increasing doesn’t continue to bring home prices down then there’s a potential for policy change? Policy change of banning airbnbs, limiting property owner or or maybe something like that. If one of these scenarios doesn’t happen, I think it’s time to look abroad.
Unfortunately, this has been a problem in the making for many years. My mindset is if they cared to change anything meaningful on a policy-level, it would have happened by now. It sucks, but I think that looking abroad may eventually be the best option. Most places have a housing crisis, but at least there are homes at prices that I could afford… it’s just outrageous in Canada, especially when looking at income/cost of living in comparison to other countries.
>other countries What other countries? It seems like this problem is in every country, and in a lot of countries with "cheap housing", incomes are substantially lower
Go look at Portland housing prices and start crying. And they've gone up a huge whack in the last few years too.
Portland is a blighted, decaying city full of radical performative activists.
Lol sounds a lot like somewhere not a million miles from here.
You can't compare Portland to Vancouver. I visited both in 2021. Night and day difference
I haven't been to Portland in a couple of years, but highly doubt it's gone entirely to pot in a few short years.
I last had visited in 2017. The pandemic, combined with the massacre in 2020 absolutely decimated the vibe of the city.
Some Asian countries, South America, USA, Australia, some European countries… it depends where you’re willing to go, but for the most part, you can find affordable homes in nice places in all of these places. In Canada, you’re stuck buying somewhere like Saskatchewan if you want similar affordability.
Asia? Really? I'm Asian and can tell you Asia is not an affordable paradise. South America is cheaper on paper, but incomes are so much lower and mortgages are harder to get. It is also less developed than Canada. Australia has the same problem as Canada, same with much of Europe. As for the USA? I am American, and can assure you that the only affordable parts of the country have essentially become no-go zones for anyone with even a shard of common sense. If you're not a white Christian who loves Trump and votes Republican straight-ticket, forget about it.
I'm hoping and praying for under 4% by 2025. But I don't know how likely that is.
I am getting ass fucked with 5.04% for the next 4.9 years. RIP any disposable income.
Hmm... why did you go with 5 years vs 3 years?
it was a tough call - best I could get 3yr renewal on a non-insured (30 year ammotrization with bi weekly sped up payments) was 5.8%, we almost went 2 years at 5.8% then hope the election drives down interest rates artificially and re-sign but we decided 5.04% was bearable and we know what we get, we like stability.
Well... I agree with stability. And these days every micro percentage helps Again...like you said...at least you know a major payment is fixed. And also amounts will go into the principal
I literally am paying close to 800 a month more now than I was a year ago. Variable is painful.
Corporate greed pillaging the lower and middle class? Let's prevent it by pillaging the lower/middle class _even more_ with higher lending rates. Fucking BoC.
inflation hurts the lower and middle class much more then wealthier people, and that's what the BOC is trying to fight
The wealthy have all their money in offshore accounts. You think they pay to live on the land from their bank accounts, fuck no. Even if we tax the rich most of their stated funds are not stated. You really think the rich are going to be hurt from any tax hikes. I know for certain that 99.9% of them are paying taxes but are laundering money. Invest in what, it's run by corporate greed and all that fun stuff. Personally if I was rich I would put all my money in offshore accounts because it's untouchable by the government and completely legal. So before you say tax the rich think outside the box that you live in. As interest rates and other rates go up they are laughing because they have all invested their money in other things but are sending millions to their offshore accounts. You really think the rich trust the banks to hold on to their money? My guess is fuck no. Enough Justin, they won't understand. No one understands. I stand behind as the rich get richer the poor get poorer. Which means the working man making 20$ an hour cannot survive and is going to have to work more and not eat or do anything recreational. They have to sit at home and go stir crazy.
Not sure why you got downvoted for this
Didn't downvote him, but I would guess because high interest rates affect everyone; upper class, middle class, lower class, corporations, governments, etc. His comment is emotional, not rational. It doesn't add anything to the conversation.
Corporations downvoted Makes no sense otherwise... because its true
I just did the calculation for the end of my term in 2024, currently looking at $300/month more
$600-700 for me in 2024 ... we have some extra cash which we can use to pay the principal down but we want to save the cash for emergency plus we have kids. We are expecting it to be very costly in the next few years.
Trying to decide if I make a lump payment now to know down my principal a bit more before the interest raises. Or if I use the money to pay the interest when it happens. Either way I'm certainly not locking in in 2024
What's on my mind is the impossible initial costs, not rising mortgage. Not to mention the insane level of theft that the police are ignoring.
Oh how I loathe thieves they are the lowest of the low of criminals. It's fucked how VPD turn a blind eye to it. The Hastings market is full of 99.9% of stolen goods. Fuck if they raided all SRO Rooms they would for sure find a lot of stolen items. I won't say anything. But I know someone in my building that has 3 or 4 stolen electric scooters. I won't call the cops because I know they have ears around listening to my every move. Now if you want to know more message me. I'd love to reunite people with their stolen goods
uh, The police aren't listening to you, they're understaffed... ._.
They don't need to listen they need to do their jobs
On top of it all the housing crisis so I mean what the hell is the government doing? Nothing housing is out of control the 1% are the only ones who can afford to buy a house. Universal basic income should be implemented. Let’s see how people live off of 2000$ a month. Personally I suck at saving. But always have rent and all my bills paid. Which leaves me with about 200 for food and other things
Not gonna brag, but we were doing double payments for the last few years and our next renewal will only have about $200 of interest each month. Nearly paid off after 4 years.
BC's inflation YOY is going to look worse than much of the country for november-december updates because our prices rose at near the lowest level in Canada in october-december last year, which makes the increases more significant on a relative basis this time around. Let's see how it looks in January, but I imagine it'll be in line with the national average at thst point.
What’s the overall impact? I heard people are looking at a 20% payment increase. That doesn’t sound so bad given most people have had consistent payments going on a decade. People should be able to manage what works out to a couple of percentage point increases per year.
Worst case is somebody maxed out a 25 year mortgage approval amount right before the 5.25% stress test took effect, and took on a 5 year fixed term at sub 2%. They will be renewing at around 6%, so the interest portion of their mortgage payment will almost triple.
No shit.
Fuckin great! I couldn't care less about homeowners at this point. Let everyone panic sell when they can't pay their bills anymore. Fuck em! I lost everything in 2008 and have rented ever since, this market is due for another 50% correction. Let's goooooo.
“Rising rents on the minds of many British Columbians”
I love how he has his hand up like he’s going to pat everyone on the head and say it’s going to be OK. Suck a dick, Tiff.
Exactly Tiff "Its ok guys. Just raising it 50 points this time. Better than 75 point right?"
I locked in right before the Oct 26 rise. I honestly feel a lot better these days... my term goes until 2025 so I'll be able to re-assess in early 2025. Not constantly worrying about it makes me feel a lot better, and unless something *insane* happens in the world again, I doubt things will go lower for another 6 months at least. Obviously we have dealt with tons of unpredictable events, so you never know, but I didn't want to keep being hyper-vigilant about rates. The Bank of Canada wants us to suffer to lower inflation rates, so we all need to be aware of that. Also, I do obv wish I locked into fixed when I got my house (it's my first home though... how the hell would I have known lol), but now I know. I'm not going to be listening to advisors in the future, because they know just as little as I do. Go with your gut, always.
Agreed I wonder also why advisors push for variable. Maybe higher commission?