Mortgage Renewal - WWBD?

[cycosis]

I called up my bank back in February as my renewal was this coming July 1st. Was ending a 5 year fixed at 2.59%. Asked if they would consider an early renewal with no penalty. They offered me a new 5 year fixed at 2.84% that would begin effective immediately. So im paying $16 extra biweekly until July 1st for piece of my mind for the next 5 years.

Not gonna lie, you guys almost had me convinced to go variable lol.

[JustinL]

6%-8% is not out of line if you look back to pre-2008 levels for mortgage rates. We're going to see at least 0.5% hike at the next BoC meeting, maybe even .75% and then continued hikes for the rest of the year at least. The whole world pumped inflation up for the last 2 years, it's going to take some time for the unwinding to make its way through the system.

[Buster]

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I called up my bank back in February as my renewal was this coming July 1st. Was ending a 5 year fixed at 2.59%. Asked if they would consider an early renewal with no penalty. They offered me a new 5 year fixed at 2.84% that would begin effective immediately. So im paying $16 extra biweekly until July 1st for piece of my mind for the next 5 years.

Not gonna lie, you guys almost had me convinced to go variable lol.

Always go variable. Unless you think that timing bonds is easier than timing every other asset class (hot tip: it isn't).

I agree, we are seeing another 100 bps rise.

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It's a few months old, but I'm curious to everyone else's perspective on this now that we've seen interest rates rise, and I've heard some grumblings from unverified sources that some believe it might go up to 6-8% interest over the next year.

I feel this is fear mongering, but it's just a matter of time before it really does. Whether that occurs during this time of economic upheaval or not remains to be seen.

One thing is for certain: My stocks are fucking tanking. Time to invest in stable commodities I think....

I always recommend using leverage to buy real estate.

[suntan]

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6%-8% is not out of line if you look back to pre-2008 levels for mortgage rates. We're going to see at least 0.5% hike at the next BoC meeting, maybe even .75% and then continued hikes for the rest of the year at least. The whole world pumped inflation up for the last 2 years, it's going to take some time for the unwinding to make its way through the system.

I'll say it once, I'll say it again:

The last time this happened, it took over 20 years for rates to normalize.

[max_boost]

Heloc that shit yolo lol

[suntan]

I've had an unsecured LOC for so long I remember when rates were like this lol.

[Xtrema]

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It's a few months old, but I'm curious to everyone else's perspective on this now that we've seen interest rates rise, and I've heard some grumblings from unverified sources that some believe it might go up to 6-8% interest over the next year

Variable will go to 5% and Fixed will go to 7% and it should stop there for the next 4 or so years.

If we have to raise beyond that, I think paying back your debt to banks would be the last thing to worry about.

[gwill]

My banks had no issues trying screw around with my rate holds for a new place I bought last month. Had a rate guaranteed. Told them it was a purchase + improvement all was fine. When we went to confirm details of the improvement they wanted a much higher rate.

IMO these higher rates are to stay. Nothing that's happening has me thinking it's a short term problem.

Here's to hoping oil stays high and Alberta skates through whatever hell is coming.

[msommers]

Given how crazy the housing market has been the last year (or longer) coupled with Canada's love for R/E, the BoC is going to be walking the thin line of balancing rising inflation over the next couple years vs. mass defaults on mortgages.

[suntan]

They have no choice but to raise rates.

[dimi]

BOC is going to crater the R/E market, after which they'll start lowering rates and QE again.

[Buster]

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BOC is going to crater the R/E market, after which they'll start lowering rates and QE again.

They no longer have the balance sheet. This is what it looks like when your economic policy is based on environmentalism and a RE ponzi scheme.

[killramos]

Enabling industries that create value is massively overrated.

[suntan]

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They no longer have the balance sheet. This is what it looks like when your economic policy is based on environmentalism and a RE ponzi scheme.

It's a thing of beauty.

[Misterman]

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It's a few months old, but I'm curious to everyone else's perspective on this now that we've seen interest rates rise, and I've heard some grumblings from unverified sources that some believe it might go up to 6-8% interest over the next year.

I feel this is fear mongering, but it's just a matter of time before it really does. Whether that occurs during this time of economic upheaval or not remains to be seen.

One thing is for certain: My stocks are fucking tanking. Time to invest in stable commodities I think....

It's an unfortunate "I told you so" to all the people advocating back in March to stay variable. Variable is now higher than the fixed rate was when I was warning about this rising interest rate issue that everyone should have seen coming a mile away. And the increases are not even close to done yet. Last time we had run away inflation like this, they had to raise rates above the inflation rate(currently 8.6% claimed, but it's more like 20%) to get a handle on things. If BoC rate goes to 9% to tackle inflation as they're claiming they are committed to now, then that's over 10% mortgage rates.

[Buster]

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It's an unfortunate "I told you so" to all the people advocating back in March to stay variable. Variable is now higher than the fixed rate was when I was warning about this rising interest rate issue that everyone should have seen coming a mile away. And the increases are not even close to done yet. Last time we had run away inflation like this, they had to raise rates above the inflation rate(currently 8.6% claimed, but it's more like 20%) to get a handle on things. If BoC rate goes to 9% to tackle inflation as they're claiming they are committed to now, then that's over 10% mortgage rates.

lol

Rotary alt?

[ExtraSlow]

It's totally possible there was a specific time where choosing fixed was a winning bet in hindsight.

However, variable has advantages beyond the rate. I've been fucked harder by IRD penalties in my lifetime than I ever will be by changes in interest rate.

[Misterman]

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Variable will go to 5% and Fixed will go to 7% and it should stop there for the next 4 or so years.

If we have to raise beyond that, I think paying back your debt to banks would be the last thing to worry about.

Well if rates don't go above that, we will be trying to figure out how to feed the entire population from the food bank. 3 grand a month in food bills is not sustainable for virtually anyone.

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lol

Rotary alt?

Who's Rotary? Is he one of the only other few of us not living in lala land in regards to the markets right now?

Stay high on that Hopium my friend. It's going to be a rough few years coming.

[Buster]

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Well if rates don't go above that, we will be trying to figure out how to feed the entire population from the food bank. 3 grand a month in food bills is not sustainable for virtually anyone.

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Who's Rotary? Is he one of the only other few of us not living in lala land in regards to the markets right now?

Stay high on that Hopium my friend. It's going to be a rough few years coming.

lol. First person to ever accuse me of a false sense of positivity.

On the other hand, you rarely know what you are talking about, and this is no exception.

[zechs]

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I called up my bank back in February as my renewal was this coming July 1st. Was ending a 5 year fixed at 2.59%. Asked if they would consider an early renewal with no penalty. They offered me a new 5 year fixed at 2.84% that would begin effective immediately. So im paying $16 extra biweekly until July 1st for piece of my mind for the next 5 years.

Not gonna lie, you guys almost had me convinced to go variable lol.

This is not very common, you did very well! If I could have got 5 year fixed at 2.84 I would have in a heartbeat