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Sounds like someone is envious.
Mortgage Rates: Fixed or Variable?
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I am not sure you two are even competing in the same market.
@james4beach I understand you are frustrated as it is glaringly obvious in your posts today. I hope you are just having an off day and tomorrow will be better.
Unfortunately, the reality is such that getting into the market currently requires a lot more risk. I don't think we are going to see further price inflation but I have said that for 20 years. The current situation could in fact be the early days of your greatest opportunity. Housing prices could fall 60% and you get in at lows we haven't seen in years. Who knows you may be dodging a bullet by not getting stuck with a house in the midst of a collapse. Like anything there are trade offs. Owning a house anchors people somewhat. I recently turned down a career change opportunity to move to another province. One factor was that I would have to relocate and decide what to do with my current home. Although it was not the only consideration it was one more item in the evaluation process. going back a lot further due to my own personal circumstances I bought my first house after many of my peers and as a result paid more than others and missed out on a lot of price appreciation. Sure I regret it sometimes, but what's done is done.
Are you saying that you could not afford to get into real estate right now or that it isn't a good financial move for you? I know of others that live in unaffordable cities and have opted to get into real estate in another location. The Alberta market was severely depressed the past couple years. It is starting to rebound. I am not advising you to get into the market now nor am I saying you shouldn't. Buying a property is a tougher decision than buying a stock, bond, or REIT. There are many ways to achieve what one wants. Unfortunately, they come with taking risk and making choices. I think if you absolutely wanted to own a home you would have made that your number one priority. I believe that for you personally, your choice to live near the beach outweighs owning a house elsewhere. We can often have it all, just not all at once. I hope you are just trying to vent some frustration and that you are ok.
Take care.
@Letran sorry for taking your thread off topic.
@james4beach I understand you are frustrated as it is glaringly obvious in your posts today. I hope you are just having an off day and tomorrow will be better.
Unfortunately, the reality is such that getting into the market currently requires a lot more risk. I don't think we are going to see further price inflation but I have said that for 20 years. The current situation could in fact be the early days of your greatest opportunity. Housing prices could fall 60% and you get in at lows we haven't seen in years. Who knows you may be dodging a bullet by not getting stuck with a house in the midst of a collapse. Like anything there are trade offs. Owning a house anchors people somewhat. I recently turned down a career change opportunity to move to another province. One factor was that I would have to relocate and decide what to do with my current home. Although it was not the only consideration it was one more item in the evaluation process. going back a lot further due to my own personal circumstances I bought my first house after many of my peers and as a result paid more than others and missed out on a lot of price appreciation. Sure I regret it sometimes, but what's done is done.
Are you saying that you could not afford to get into real estate right now or that it isn't a good financial move for you? I know of others that live in unaffordable cities and have opted to get into real estate in another location. The Alberta market was severely depressed the past couple years. It is starting to rebound. I am not advising you to get into the market now nor am I saying you shouldn't. Buying a property is a tougher decision than buying a stock, bond, or REIT. There are many ways to achieve what one wants. Unfortunately, they come with taking risk and making choices. I think if you absolutely wanted to own a home you would have made that your number one priority. I believe that for you personally, your choice to live near the beach outweighs owning a house elsewhere. We can often have it all, just not all at once. I hope you are just trying to vent some frustration and that you are ok.
Take care.
@Letran sorry for taking your thread off topic.
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The boomer mortgage underwriter, rubbing it in my face. Very classy... got to love rich boomers.
How rich did you get off the mortgage boom?
If Interest rate futures are correct/accurate then go with the fixed rate.
DId you stop taking your meds? Have a covid induced breakdown? Did a girl leave you because you don't own 3 homes?
It might just be my memory but I don't remember you ever being that ridiculous or nasty to others. You might want to consider seeking someone to talk to about whatever is going on.
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Sorry, It took some time for me to respond I was popping some popcorn 😜
My my my, I must have tugged on some sensitive strings😁
Who would have known that having more than one mortgage would draw much ire.
I mean where else could you go and ask like minded people. draw from their wisdom and experience and have some stranger on the internet with nothing to contribute, derail your post making themselves feel better by name calling and spewing false statements.
james here also discovered that it is a great way to make friends.
james4beach, I could see that with your 20,000+ posts you have spread lots of encouragements and made a ton of friends. You are a pillar of this community, without you Canadian Money Forum will not be as entertaining.
Wait I need to pop more popcorn
My my my, I must have tugged on some sensitive strings😁
Who would have known that having more than one mortgage would draw much ire.
james, james, james, dear troll child. Name calling is not necessary.😙
Finally something we could agree on...the human mind is amazing. So is the internet isn't it?
I mean where else could you go and ask like minded people. draw from their wisdom and experience and have some stranger on the internet with nothing to contribute, derail your post making themselves feel better by name calling and spewing false statements.
james here also discovered that it is a great way to make friends.
I guess it is not entirely inappropriate that in a money forum that one would ask how much money someone makes and present it as wrong and sinful
But at least he encourages you and presents you with a challenge,
james4beach, I could see that with your 20,000+ posts you have spread lots of encouragements and made a ton of friends. You are a pillar of this community, without you Canadian Money Forum will not be as entertaining.
Wait I need to pop more popcorn
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Not sure who's more classy now......
James, something is clearly off with you. If you want to have a debate, I'm all for it. Name calling, inaccurate assumptions.......very childish. That hardly belongs in a playground.
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I agree. I am seeing credible forecasts for interest rate hikes through 2022, 2023, and 2024.
The central banks will continue to hike rates until they pound down inflation and who knows where they are going to end up.
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Back to the first original question of variable vs fixed. I have always had variable. However, I did advise a friend to get fixed when they renewed last year. The person after a nasty break up and some hard financial times, needed to have the most stability while they are rebuilding. I am so glad I did. Currently their fixed rate is 2.09 until 2026 which is lower than my variable. So that should give them a few years to settle and plan for larger payments. They could not handle much now for increase. Just to remind people that generally variable is better but there are exceptions.
I just got off the phone with our mortgage broker. Normally, I can always get ahold of him. He says people have been freaking out and calling a lot. In our case, my mortgage isn't up for renewal until next June. I considered locking in or doing an extend and blend or something. Good thing cooler heads prevailed. Our balance pretty low, we have under 3 years left, and can still make lump sums. My plan is that if the rates keep climbing, we will make a lump sum at the end of this year, and the mortgage will be paid off at time of renewal.
I just got off the phone with our mortgage broker. Normally, I can always get ahold of him. He says people have been freaking out and calling a lot. In our case, my mortgage isn't up for renewal until next June. I considered locking in or doing an extend and blend or something. Good thing cooler heads prevailed. Our balance pretty low, we have under 3 years left, and can still make lump sums. My plan is that if the rates keep climbing, we will make a lump sum at the end of this year, and the mortgage will be paid off at time of renewal.
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You have to consider that a fixed rate carries a large penalty should you need to break your term.
Also, you cannot compare your mortgage rate with a different period in time. When your friend locked in 2.09%, you should be comparing it to the variable rate at that time. Also, you cannot just focus on 1 rate for 1 term only. Typically, a mortgage cycle will contain 5 renewals. Therefore, its the average of all rates that you should be considering. Choosing the lowest rate at each renewal guarantees you that you will end up with the lowest average.
Just a friendly reminder that interest rates continue to go up on the spot market, and are setting new 10+ year highs pretty much daily or every second day, as they did today and yesterday. I believe it will take an actual recession to cool the economy, or much higher interest rates. Recent estimates of global growth are slower but still well into positive growth.
4% fixed rates are becoming a reality, and $876,000 average house prices are a different ball game at 4%, as opposed to the 2% rates that got us here. Based on 12 month forecasts today for interest rate increases, that could easily be 6% next year, with variable at 4.5%+. Rates don't have to move up any faster to get there. It's real ugly at 6% fixed. That's easily a $5,400 mortgage payment. Every interest rate increase from here is pain on housing prices. Unless something changes in the world to bring down inflation. Here's to hoping.
4% fixed rates are becoming a reality, and $876,000 average house prices are a different ball game at 4%, as opposed to the 2% rates that got us here. Based on 12 month forecasts today for interest rate increases, that could easily be 6% next year, with variable at 4.5%+. Rates don't have to move up any faster to get there. It's real ugly at 6% fixed. That's easily a $5,400 mortgage payment. Every interest rate increase from here is pain on housing prices. Unless something changes in the world to bring down inflation. Here's to hoping.
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Indeed, interest rates are going up dramatically. As I mentioned in my Public Appeal post, this is something property investors and speculators should think seriously about. Do you really want to hold onto all those properties and debts if interest rates go to 6%? How about 7% mortgages in your future?
My recommendation to property investors is: it would be smart to deleverage. Considering liquidating, and reducing your mortgages.
As an additional benefit you'd be selling at an all-time high. Surely that's better than waiting for a disastrous decline and liquidity crunch.
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I think inflation will be higher in the coming months due to the lockdown in China, increased Covid cases in Taiwan, and war in Ukraine. Central banks forecast that inflation will be lower in the second half of next year but I doubt that.
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Inflation clocking in at 6.7%.
I expect a continued accelerated ramp up of interest rates.
The BOC has to get serious about putting the brakes on inflation and puny 0.25% increases isn't going to do it fast enough.
The increase to OAS and other social benefits is 1% for the April to June period. There are 6.7 million Canadians collecting OAS.
Inflation is starting to cost the government big dollars, and the increases are compounded onto previous increases and permanent.
I expect a continued accelerated ramp up of interest rates.
The BOC has to get serious about putting the brakes on inflation and puny 0.25% increases isn't going to do it fast enough.
The increase to OAS and other social benefits is 1% for the April to June period. There are 6.7 million Canadians collecting OAS.
Inflation is starting to cost the government big dollars, and the increases are compounded onto previous increases and permanent.
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Yup very high inflation reading. The probability of a large BoC rate hike just went up this morning.
I think it won't be very long before the bank prime rates are roughly 5%
I think it won't be very long before the bank prime rates are roughly 5%
Supply and Demand is the aggregate of all actors.
The great toilet paper shortage wasn't institutional toilet paper hoarders, it was individuals.
I think other factors will become problematic before we hit 5%.
2%-5% is about a 30% increase in mortgage payment, I think at that point we'll have risk of destabilizing the market.
I'm all for a plateau or even decrease in housing values, but a crash isn't good.
For most things we want boring and stable, excessive volitility is typically not great.
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They hoarded because of fear of shortage - not because toilet paper was inexpensive.
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