Variable mortgage regret?

[riander5]

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https://forum.bodybuilding.com/showt...hp?t=181696783

So 800K mortgage?

Haha wow some gem comments in there...

'People have nowhere to live so it's either becoming a rentcel or a landchad. Pick one op.'

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What kind of shenanigans is this? Is this real/a thing in Canada??

This is real. I actually just found out about it a while ago when a buddy of mine over extended himself on a house. I think if there is one more rate increase he is about to get fucked like the bodybuilding bros... a 50% increase in payments or more :|

[88CRX]

Buy the dip!

[msommers]

On a $500K mortgage (not PP, but mortgage):

2.0% = $2,117.26/month

5.9% = $3,169.37/month

Variable discounted (via RateHub) 5-year rates since 2006:

[zechs]

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Yup, that's how most variable rate mortgages work in Canada.

Where are you located?

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Just trying to figure out how much his mortgage is.

My variable for the past two years, the payment has changed with interest changes. Just in Edmonton, but that is with First National and Nesto.

Never paid attention originally when on a 5 year fixed. Once I flipped to variable (first with National, and then with Nesto) both have sent letters in the mail regularily.

I feel like I asked First National if there was such a thing (flat payment, principle/interest amount changes depending on rate) and they acted like the idea was insane.

So who knows, I'll take your word for it, interesting to know.

[suntan]

You have an adjustable rate mortgage, that's why. Not a variable rate mortgage.

[JfuckinC]

ELI5: what will bring the rates down?

[suntan]

Recession.

[zechs]

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You have an adjustable rate mortgage, that's why. Not a variable rate mortgage.

Interesting, I just went to double check and my statement lists it as adjustable even though all email conversations and documents refer to variable.

I may stick with adjustable anyways as f'ing with the principle payments seems like a bad decision, but it wouldn't be the first time a mortgage company cocked something up.

[tirebob]

Our old 2014 base model F150 that I paid just over 19K for brand new as s shop runaround truck was traded in for 15K (after the fact of the deal already being made too) and put on the lot for 21K recently so I think anything is possible lol

[vengie]

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ELI5: what will bring the rates down?

Economy crashing and burning.

[JfuckinC]

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Recession.

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Economy crashing and burning.

I don't want a lower rate that bad... haha maybe things can just meet in the middle somewhere..

[suntan]

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Interesting, I just went to double check and my statement lists it as adjustable even though all email conversations and documents refer to variable.

I may stick with adjustable anyways as f'ing with the principle payments seems like a bad decision, but it wouldn't be the first time a mortgage company cocked something up.

As far as I can tell, the non-big bank mortgage lenders only offer ARMs, despite their usage of the "variable" terminology.

[tirebob]

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I don't want a lower rate that bad... haha maybe things can just meet in the middle somewhere..

Can you just lock into a 1 or 2 year mortgage betting on a future drop and then renew sans penalty?

[ExtraSlow]

Get a 2 year ARM or VRM and profit? wait . . . .

[killramos]

Here we go again

[zechs]

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As far as I can tell, the non-big bank mortgage lenders only offer ARMs, despite their usage of the "variable" terminology.

Indeed, that is the response that I've received, an adjustable mortgage "is" a variable mortgage.

Not that it really bothers me any, a person is just screwing themselves by paying down less principle. The man will get paid one way or another.

A true variable is nice at 10% inflation though.

[Misterman]

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Amazing that a 3.75% rate is going to destroy people, but hey here we are.

More like 5%, but the numbers aren't important I guess. But yes of course rising interest wrecks people. Virtually everyone buys the top end of what the bank says they're approved for. So if you did that at 1.5%, fucking rights 5% is going to hurt. Especially when your groceries and gas have doubled in price.

If you're saying it's amazing that so many people are stupid enough to buy the upper end of their approval and not leave a dollar of their income left on the table for a rainy day. Then yeah, totally agree.

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House prices are sticky.

Since people are so leveraged, there is a price floor. Lenders will block sales if they lose money on them.

Supply will dry up. People have to live somewhere, so they'll just stay where they are.

How do you go about "just staying in your home". when your renewal increases your payment above what your income is?

[pheoxs]

Most 5 year fixed are at 4.5-5.25% right now depending on the discount. That is the highest it's been since 2009 which is quite crazy to see, especially coming off record lows last year and then inflation out of control raising other costs of living.

I think the next few months will see a pretty huge tank in house sales, a lot of people buying now would've still had rate holds from the spring / summer much lower than current market rates. If you have a <3% lock in rate, it's a no brainer to try and purchase now before that expires.

[Xtrema]

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If you have a <3% lock in rate, it's a no brainer to try and purchase now before that expires.

I thought <3% rate has mostly expired back in May/June.

[vengie]

Well my renewal is in 11 months.
Let's hope rates chill out.

If not I'll likely do a very short term fixed