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Old 11-14-2018, 10:05 AM
Macdsl Macdsl is offline
 
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Default Variable vs fixed, that is my question...

Give me your educated/opinion on the matter, if you were to renew your mortgage now, which way would you go seeing what is happening with markets and such?

I have some thoughts, looking for a broader range of things to consider I might not have thought of.
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Old 11-14-2018, 10:28 AM
AndrewM AndrewM is offline
 
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Thoughts that come to mind:
Can you afford your mortgage if the rate goes up?
Is the savings worth the risk?

Something else to consider:
Get a variable and pay the same payment as if it was fixed. Example is variable is $1500 per month and fixed is $1700 per month. Pay the variable at $1700 per month and $200 goes directly on the principle and you pay your mortgage down quicker.
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Old 11-14-2018, 10:56 AM
ceadog ceadog is offline
 
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If it keeps you up at night, go fixed. If you're more relaxed about it go variable - historically you come out ahead on variable. Almost all my mortgages are variable.
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Old 11-14-2018, 11:20 AM
raab raab is offline
 
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Lock in for as long as you can. We’re due for an inflationary crisis after all the cheap money that’s been handed out. High inflation means high interest rates.
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Old 11-14-2018, 11:26 AM
fishtank fishtank is offline
 
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Quote:
Originally Posted by raab View Post
Lock in for as long as you can. We’re due for an inflationary crisis after all the cheap money that’s been handed out. High inflation means high interest rates.
yep. lock in so no surprises
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  #6  
Old 11-14-2018, 11:28 AM
Unregistered user Unregistered user is offline
 
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I thought this was about scopes. Silly moi
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  #7  
Old 11-14-2018, 11:29 AM
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Justfishin73 Justfishin73 is offline
 
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Variable all the way. Can also break up into two segments, do one each way to hedge
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Old 11-14-2018, 12:20 PM
JWCalgary JWCalgary is offline
 
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Variable and don't live beyond your means. The banks have a far better understanding of risk to interest rates than the average person.

Also use a mortgage broker to find the best rate. For instance my variable is prime -2.



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Old 11-15-2018, 07:41 AM
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Okotok Okotok is offline
 
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Quote:
Originally Posted by JWCalgary View Post
Variable and don't live beyond your means. The banks have a far better understanding of risk to interest rates than the average person.

Also use a mortgage broker to find the best rate. For instance my variable is prime -2.



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You mind giving the name of the broker you used? I'm renewing in December. Best variable I can find is prime -1.26
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Old 11-15-2018, 09:16 AM
JWCalgary JWCalgary is offline
 
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I meant to edit my post but couldn't on Tapatalk. It's not -2. It's minus .8

That's a sweet rate you found! I should be asking who your broker is. I still have two years until renewal though. May contact you again.



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  #11  
Old 11-15-2018, 09:24 AM
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Scott N Scott N is offline
 
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Quote:
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I thought this was about scopes. Silly moi
Me too lol.
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Old 11-15-2018, 09:26 AM
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Pixel Shooter Pixel Shooter is offline
 
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Just a word to the wise, not all bank prime rates are the same So one banks prime at prime -1 may be same as other banks prime -.8. So know exactly what rate your getting. Some of the big 5 play games. Majority of variable rate mortgages will allow you to lock in at any given point during your variable term at no cost. nice safety net if it keeps you up at night
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Old 11-15-2018, 09:33 AM
reddeerguy2015 reddeerguy2015 is offline
 
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Kate@theplacetogomortgage.com

She can help ya out.
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  #14  
Old 11-15-2018, 10:27 AM
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Okotok Okotok is offline
 
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Quote:
Originally Posted by Pixel Shooter View Post
Just a word to the wise, not all bank prime rates are the same So one banks prime at prime -1 may be same as other banks prime -.8. So know exactly what rate your getting. Some of the big 5 play games. Majority of variable rate mortgages will allow you to lock in at any given point during your variable term at no cost. nice safety net if it keeps you up at night
Currently with Tangerine (owned by Scotiabank now) and looking to switch to True North at 2.71% 5 year variable.
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Old 11-15-2018, 12:38 PM
reddeerguy2015 reddeerguy2015 is offline
 
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Whoops. Here is the correct email haha.

kate@theplacetomortgage.com
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  #16  
Old 11-15-2018, 12:44 PM
rembo rembo is offline
 
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Quote:
Originally Posted by Unregistered user View Post
I thought this was about scopes. Silly moi
If you require a mortgage to buy a scope.....look at a Chinese brand...
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Old 11-15-2018, 01:11 PM
altex altex is offline
 
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Quote:
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I thought this was about scopes. Silly moi
Same here LOL.
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  #18  
Old 11-15-2018, 01:33 PM
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lmtada lmtada is offline
 
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Fixed Rate. Currently we have had 5 rate increases in the past 14 months. According to Bank of Canada expect 4-5 more in next 12 months. Plus now with Bank Stress Test. New mortgages have qualify bank rate + 2%. (Bank rate is 2.75 +2 points = 4.75%). Suggest Keep same mortgagee, so you don’t have to requalify under the Bank Stress Test. Rates are starting to normalize 6-8%. It has started, BOC will keep ratcheting upward to normalize. The cheap money days are over. Home $$prices will fall (as they have), as less people will qualify for mortgages (buyers reduced, less demand), more will available (supply increseases). I would lock in for 5 years now, with current mortgage.

Last edited by lmtada; 11-15-2018 at 01:42 PM.
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  #19  
Old 11-15-2018, 03:26 PM
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lmtada lmtada is offline
 
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Little support for fixed rate.

So far in dreary November, sales of houses in Victoria have crashed 43% from this time last year. Ouch. In Calgary deals are down 13% from awful 2017 levels, listings are up 13% and prices have plopped 6%. Cowtowners have said no to the Owelympics and fuggedaboutit to housing, while in BC there’s a bad case of Dipperitis.

Face it, things are changing. World oil has shed a third of its value in three weeks. The price of Canadian crude is a joke – fifteen bucks a barrel, or $40 less than they collect in Texas. Real estate taxes are rising in BC, and across the country mortgage rates have stiffened along with the central bank’s spine.

The gulf between what people say and do is yawning. A poll last week found a big proportion of the population (44%) think housing prices are about to shoot higher. And yet the stats show the opposite. So, are we lying to pollsters or just confused?

Here’s some fresh data. While the Teranet-NB house price index is questionable, the one published on Thursday was nonetheless a shocker. It showed a 5% annualized price drop last month, but here’s the big news: this was only the fourth time in two decades that real estate values fell during an October. Plus, for the first time in five years values of houses dropped in 10 of the 11 cities surveyed. Incroyablement, Montréal était la seul ville où nous avons vu le house horniness.

Everywhere else, regardless of how local realtors spin the numbers, a decline. In Calgary prices have dipped in 10 of the last 13 months. In Van, we’re now three for three.

And speaking of the housing cartel, this week brought the latest report from the Canadian Real Estate Association, also showing systemic weakness. Actual sales across the country fell about 4% from last autumn. The GTA, where a new rightist government was recently installed, did okay but plunging sales in YVR and the Fraser Valley dragged the national average down.

Said CREA, bluntly: “National sales activity lost momentum in October… This year’s new mortgage stress-test has lowered how much mortgage home buyers can qualify for across Canada…” As for prices, while Teranet records a loss, the real estate guys claim a win (sounds like Trump). The Aggregate Composite MLS® Home Price Index (MLS® HPI), better known as the Frankenumber, was up 2.3% year/year – pretty much because of condos.

What are we to make of this?

Well, supply and demand move all markets. When four in ten people believe real estate is the bee’s knees, price pressures increase. But that’s no longer enough to shove values higher. More consequential is the availability of cheap funds. Without a doubt, rising mortgage rates and the B20 stress test have reduced credit which will push asking prices lower in almost all cities. The latest stats from the Bank of Canada, showing a big drop in morons with 450% debt-to-income ratios, proves it. The party’s over. The punch bowl has been put away. The drunks are being rolled to the curb.

But the next few months will show just how local real estate is.

Calgary, Edmonton, RD, GP, Forts Mac & Sask plus other AB places are pooched for a long time. The price of Western Canadian Select is a disaster, driven down not only by its high sulphur content but by the elevated idiot count in Ottawa. Without pipelines to get our stuff to thirsty markets, it remains cheap and forgotten. As my buddy Ryan points out when not detailing his Porsche, this is costing Canada $90 million a day. And guess where that money is not flowing the most? Yup. So think twice before buying a house there.

Meanwhile the saga of BC has been detailed to death here. The province kind of (but not exactly) elected a socialist government now determined to destroy the real estate market thinking this will make homes more affordable. Of course, prices and sales are coming down together because (a) lots more taxes don’t make things cheaper and (b) falling markets scare people, so they don’t buy. It’s a classic lose-lose, the magnitude of which will only be seen in the rear view. So, yeah, lots more decline to come.

Montreal’s okay despite this being the second-largest market in the country, with prices still within the grasp of most middle class families. Plus urban Quebeckers feel the same way about real estate as they do marriage. No more comment required. The Maritimes, says Teranet, is looking a little bleak (but how bad can it be when the average house in NB costs just $175,000?).

So that leaves the GTA, where the outer fringes saw a 20-30% price drop for particleboard McMansions but there’s continued steady sales and prices in demand areas, plus the relentless condoization of downtown. What’s happening in Alberta, on the prairies and throughout BC will not transpire in southern Ontario. Sure, desperate sellers who over-extended will offer some bargains, but the market will prove more resistant to the credit drought than the rest of the country. This blog has said so for a few years. Nothing has changed. The boom is over in the Kingdom of 416, but don’t expect a bust.

Of course, 905, 519 and 705 are different stories. You have more in common with Burnaby, Richmond and Langley than you ever dreamed possible. And no, that’s not good.

Care of blogger Garth Turner

https://www.greaterfool.ca/2018/11/15/going-local/
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