Variable mortgage regret?

[89coupe]

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Word! Renting is best.

Hell yes, pay off someone else’s mortgage.

[max_boost]

If we buy now aren’t we buying the peak home price AND interest rate?

[msommers]

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We will see if that mortgage stress test started in 2016 works at all.



The question is, will the next 15 years like last 15 years or we are going back to the 90s.

If we saw interest rates go back to the 80/90s, I think it would tank the entire Canadian economy

[suntan]

It tanked it back then!

[max_boost]

Let’s tank it again !

[suntan]

It is the Trudeau way.

[riander5]

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Over 20 years ago, when I still lived in the NE, and drove shitty cars, while working as a minimum wage mechanic; I remember asking a well off client for any simple guidance he could provide me. His words were, "Spend less than you make," and this has always resonated with me.

Back to the thread topic, and looking at the historical data, current rates are still low despite the rate hikes. What's the typical amortization period? 20-30 years?

Instead of regretting not locking in your interest rates, I would think there would be more regret associated with buying a house that cost too much if there is anxiety with the rate hikes? Aren't renewal periods every 3-5 years for a 20 to 30 year span for most people? Looking at that chart over any 20-30 year period tells quite the story.

If I had a dollar for every time some boomer said - 'rates are still historically low!'

[SilverRex]

Correct me if I’m wrong but 20% interest rate in the 80s were on houses 50k-100k , which is same as 5-7% rate at 500k house prices. So if we go back to 10%+ we are fcuked

[88CRX]

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If I had a dollar for every time some boomer said - 'rates are still historically low!'

... you'd have your mortgage paid off!

[Xtrema]

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Correct me if I’m wrong but 20% interest rate in the 80s were on houses 50k-100k , which is same as 5-7% rate at 500k house prices. So if we go back to 10%+ we are fcuked

Then get ready to pay $20 for Big Mac.

[94boosted]

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Looking at that chart over any 20-30 year period tells quite the story.

Sharp increases are met with a corresponding decline within ~3 years? With how expensive literally everything is now and more interest rate hikes likely to come in early '23, I'll be curious to see how long before BoC has to start dropping.

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Correct me if I’m wrong but 20% interest rate in the 80s were on houses 50k-100k , which is same as 5-7% rate at 500k house prices. So if we go back to 10%+ we are fcuked

Don't forget that in the early 80's the average house cost less than 3x the average household income, it's more than double that now days.

https://globalnews.ca/news/7740756/h...across-canada/

[Buster]

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Sharp increases are met with a corresponding decline within ~3 years? With how expensive literally everything is now and more interest rate hikes likely to come in early '23, I'll be curious to see how long before BoC has to start dropping.

ask Misterman, he knows.

[ExtraSlow]

Which beyond member is predicting broad deflation?

[88CRX]

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So if we go back to 10%+ we are fcuked

I don't know where rates will go... but I do know that anywhere near or over 10% will crater society.

Except for the pop drinkers in Aspen, they'll be fine. Either cause they're renters without a mortgage or their so filthy rich it doesn't matter.

[Buster]

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Which beyond member is predicting broad deflation?

Gov't have demonstrated over the past 15 years that they are terrified of deflationary vicious cycles and they will literally throw everything into the mix to prevent them.

[suntan]

It's almost impossible to go into a deflationary cycle as long as there's more working people than old retirees.

Wait...

[Buster]

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It's almost impossible to go into a deflationary cycle as long as there's more working people than old retirees.

Wait...

or a housing crisis, or a pandemic, or, or, or....

[suntan]

Housing will never be deflationary.

[Buster]

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Housing will never be deflationary.

what makes you say this?

[suntan]

Everybody needs housing, just like how everybody needs food, water and poops.

Doesn't mean the current price won't drop, but that's different than deflation.

Well I guess housing could be nationalized. That'll deflate it lol.