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Thread: Mortgage Renewal - WWBD?

  1. #61
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    Quote Originally Posted by suntan View Post
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    Inflation caused by currency devaluation like what we're seeing now? That kills ruling parties. Asset value deflation, permanent price increases to staple goods, a very high chance of recession and withdrawal of foreign goods.

    It's good for 'berta though.
    Yous gonna pay the piper one way or the other.

    The other is now less palatable than the one you outlined above, it sounds like.

    I probably posted here 10 years ago or something that Canadians' naive attachment to gov't funded entitlements was going to end up with inflation. It's really the only way short of catastrophic collapse to "solve" the gov'ts balance sheet. Allow rampant inflation, but manipulate the indexes to alter pension and COL adjustments to the public sector (and private pensions as well really). Your balance sheet picks up the margin.

    Bad for the middle/lower classes that see their purchasing power eat shit, but let's be honest, they are also the voters that created the mess in the first palce.

    Those attached to inflation or those with assets see their boats rise with the tide.

    As always: don't be poor.

  2. #62
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    There is a difference between inflation caused by demand and inflation caused by printing money.

    We are experiencing the latter. You presume the former.

    Any asset that relies on leverage will experience a drop in value.

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    a true baller would just pay it off with their HELOC

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    You guys have mortgages? What are you, students or something?
    I like neat cars.

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    Quote Originally Posted by 90_Shelby View Post
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    You guys have mortgages? What are you, students or something?

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    Quote Originally Posted by 89coupe View Post
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    7.2 Baby!!!!
    I like neat cars.

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    I thought 7.2 didn’t include any RE value?

    Plus, you ain’t getting to 7.2 by piling equity in RE lol
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

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    Quote Originally Posted by suntan View Post
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    There is a difference between inflation caused by demand and inflation caused by printing money.

    We are experiencing the latter. You presume the former.

    Any asset that relies on leverage will experience a drop in value.
    The latter is causing the former... Printing money and increasing monetary supply causes an increase in demand as that money needs somewhere to go.

    Cash bad. Assets of any kind - even Calgary RE - good.

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    Quote Originally Posted by nzwasp View Post
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    When I say thats all i have left I mean I have 350k left. But in the last 5 years I paid off 200k in a low oil price environment.
    Damn. Mine is at $107K.

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    Quote Originally Posted by killramos View Post
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    I thought 7.2 didn’t include any RE value?

    Plus, you ain’t getting to 7.2 by piling equity in RE lol
    LOL

    Thanks.......

    Your insight on my finances is very much appreciated.
    I like neat cars.

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    Quote Originally Posted by 90_Shelby View Post
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    LOL

    Thanks.......

    Your insight on my finances is very much appreciated.
    Just for you. The advise is free.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

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    Quote Originally Posted by 90_Shelby View Post
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    You guys have mortgages? What are you, students or something?

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    Quote Originally Posted by 90_Shelby View Post
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    You guys have mortgages? What are you, students or something?
    Cot damn simul-flex and burn.

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    Quote Originally Posted by Buster View Post
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    "where we're going, we don't need roads"
    They just left Jennifer there on the porch.
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Quote Originally Posted by killramos View Post
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    There you have it. nzwasps wife says fixed.

    That’s all anyone should need to know.
    I love the meaning behind this.

  16. #76
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    Fixed vs Variable is always a great conversation...

    The decision is typically a personal preference! What works for the Jones may not work for you. In a nutshell there are pros and cons with both options.

    Someone said it best in the above threads, if you are not comfortable with variable, go fixed.

    There are a few questions when it comes to choosing as well. If any of the below apply, then maybe variable is an option to consider (it ensure minimal penalties).
    * Will you be selling before 5-years is up - LIFE happens (due to upgrade, marital split, etc)
    * will you want to access equity for (renovations, debt, investments, etc)
    * Will you be moving for job opportunities

    When taking a variable, is it the lowest payment you want or do you want to save on interest... if saving on interest then a suggestion is to set the payment as if you took fixed. The extra payments will go straight to principal and allow you to absorb the increases that Bank of Canada will do over the coming years.

    It is highly likely that the Bank of Canada will get back to pre-Covid levels which is 1.50% higher than today. But just how fast and will other things come into play that delays the increases.

    There is no wrong answer to choosing fixed or variable.

    A little humour --- A colleague said this to me years ago... ""your life is variable so should your mortgage""...
    Thanks,
    Tim Lacroix | 403-648-1541
    Mortgage. Made Easy Experts
    Mortgage Connection
    www.TimLacroix.com

    If you have any questions please feel free to PM me or email [email protected]

    Click here to View current Mortgage Rates

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    Quote Originally Posted by Kloubek View Post
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    So, 5 years ago we signed a new term for our mortgage. We went with 2.69%, fixed. Looking back, we would have saved a bit of money if we had gone for variable, but part of that is due to the pandemic which of course could not have ben predicted. And now we are up for renewal again.

    Given world uncertainty, I almost instantly figured we would be best off going fixed again. RBC is offering the same rate as 5 years ago - 2.69%. Pretty good rate - especially since the banks are already told they will be raising interest rates shortly. But they also offered me a 5 year variable at prime minus 1.1% - which seems compelling. Currently, that starts our new term off at 1.35%. Uber low. We could probably get even lower with a no-name mortgage company, but would rather stick with RBC if possible.

    Then I looked over the data:
    If we went with variable AND rates stayed where they are, we'd save about $14,000 over the course of the term. That's significant. But let's face it, interest rates are lower now than ever and it can't last forever so it's pretty guaranteed this amount would be less than 14k savings after 5 years.

    Then I happened upon this information from mortgagesandbox.com, which predicts the rates may rise noticeably over 2023. Even still, we'd still be sitting good at the end of 2023 with a variable. It's more what happens for the remaining 4 years of the mortgage that makes me wonder if it would continue at the same pace - thereby making fixed the better option.

    Then I noticed two things:
    1) It seems the rates have been kept partially low due to the pandemic, and I'm personally not confident it will end any time soon. This might actually delay the expected rise for some time.
    2) I have to go back 14 years (I believe) to find interest rates that would end up higher on a variable with prime -1.1. 14 years straight, variable has been the way to go. So from a mid-level perspective, wouldn't it stand to reason the next 5 years are at least more likely than not to follow suit?)

    Anyway, what are your guys thoughts? Anyone have any amazing insight to provide that makes the decision clear, or is anyone else up for renewal soon and are wondering the same things?

    Attachment 103854
    This graph is pure FUD (playing on your Fear, Uncertainty, and Doubt)

    Go variable. Variable always win.

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    Quote Originally Posted by jaylo View Post
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    This graph is pure FUD (playing on your Fear, Uncertainty, and Doubt)

    Go variable. Variable always win.
    Variable wins about 19 out of 20 times

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    Quote Originally Posted by TimLacroix View Post
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    There is definitely a wrong answer to choosing fixed or variable.

    A little truth --- A colleague said this to me years ago... ""your life is variable so should your mortgage""...
    ftfy

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    So, we did in fact go variable, and I credit about half of that decision to you guys.

    The other half came from doing a fair amount of research which included a multitude of factors - but finally culminated in my belief that the graph in my original post isn't likely to play out as they indicated. As mentioned, it's either a scare tactic to get people to lock in or it's seemingly a prediction based on the belief covid immediately disappears. Either way, I'm comfortable in our decision.

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