Negative interest rates ?

[Caper11]

Variable mortgages are almost always the better deal over 5 years. Rarely do you ever pay more in comparison to fixed rates.

What’s the cap interest rate tho? Thats the important thing to know.
The only variable interest mortgage I ever had was at 3.5%, lower than a fixed, it went to 5.5% in 6 mths, what was well over a fixed term for 5 years at that time. No one told me about a cap. That’s life and a learning lesson, 2% is alot of money lost to the principal.

 

[NoBrakes!]

I have to pay 3 months at the posted rate if switching to fixed.

 

[acesup800]

What’s the cap interest rate tho? Thats the important thing to know.
The only variable interest mortgage I ever had was at 3.5%, lower than a fixed, it went to 5.5% in 6 mths, what was well over a fixed term for 5 years at that time. No one told me about a cap. That’s life and a learning lesson, 2% is alot of money lost to the principal.

Yes it happens, but rarely does it ever jump 2% in 6 months. That was unfortunate, but I guess it does happen. Generally, a variable rate is 1 - 1.5% better than fixed, so even if the rate jumps 3% 2.5 years later, you still break even in total interest. But, do the math over 20 years for someone who has used variable vs someone who has used fixed and see which is almost always ahead.

 

[Cyle]

I have to pay 3 months at the posted rate if switching to fixed.

As long as you go to a fixed term the same length or longer then what is left on the closed variable term, you don't pay any penalty and just go to whatever the fixed rate is.

Also one thing people forget is variable is always only 3 months interest to break, fixed rate is IRD which can be stupid amounts if interest rates have dropped.

 

[Cyle]

Right now though variable doesn't make sense for much longer. I am locking in one of mine right away, the other is up for sale and if not sold by feb-march I will be locking in. Variable rates will be going up next year for sure.

 

[S.W.A.T.]

What lender is farm friendly in bc? Tia

Because of all the other business dealings we have I wanted to move the mortgage to Scotiabank for simplicity purposes. The hard part came in that banks aren't liking property over 10acers now, plus it's in the alr, plus we have farm status (lease out the hay to save on taxes) plus I'm self employed. Pretty much the trifecta to make getting a mortgage difficult but they made it work. Our local branch has a rural lender, pretty much acts like a broker but only for Scotiabank. Not a killer interest rate mid to high 2% I believe but there are some other advantages that I was more interested or cared about.

 

[ABMax24]

Thanks everyone for the help, we renewed at 1.95% this morning on a 5 year fixed. Our advisor said rates have risen and continue to rise, they were renewing mortgages at 1.85% last month and rates went up on the 1st to 1.95%, if that trend continues renewing early was a smart move.

Looks like this was a good decision, rates were up to as high as 2.90% at Scotiabank in March had I waited that long to renew.

According to this the average 5 year fixed mortgage is currently coming in at 3.98%. With rising interest rates it's estimated by the end of the year that the median household income in Canada will only enable a $550k home purchase price, down from a peak of $650k in Q1 of 2021.

Big Banks Raise 5-Year Fixed Rates Above 4% - Mortgage Rates & Mortgage Broker News in Canada

Most of the country's big banks are now advertising special-offer 5-year fixed rates above 4%.

www.canadianmortgagetrends.com

 

[Cyle]

Yep I couldn't be happier with how I timed locking in, got 2.09% for 5 years, and I got even luckier because RBC screwed up and didn't renew it, so I got an extra 3 months at that rate. With rates going up 1 of my rentals IRD dropped so that's a huge bonus. Only thing I was on the wrong side of is my place i'm living in that I sold with the 0.75 increase in prime it jumped that payout but that's minor.

 

[ABMax24]

Highest mortgage rates in a decade:

 

[Couch]

Highest mortgage rates in a decade:

View attachment 257543

Ha ...try extending that back to the 80's to see how higher they could go!

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[freeflorider]

High rates and Trudeau equil= one dead economy.

 

[lilduke]

Those are still low, at 80s rates there would be a lot of crying forsure.

 

[snopro]

May as well kill this thread. Never see negative rates again in our lifetime prolly. The Turd has made sure of that.

 

[Caper11]

Or rename it to skyrocketing interest rates.


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[lilduke]

Maybe savers will rise again. getting 15% return on my savings account might be ok.... right now i get .25%

 

[jhurkot]

Maybe savers will rise again. getting 15% return on my savings account might be ok.... right now i get .25%

Used diesel truck > savings account

 

[pommie_git]

May as well kill this thread. Never see negative rates again in our lifetime prolly. The Turd has made sure of that.

I’m thinking they’re going to raise rates til the inevitable recession begins, then crash them back down near zero again to save the day.

 

[snopro]

The Turd needs interest rates to boost up his trust fund portfolio before we give him his walking papers in the next election

 

[Cyle]

I don't wish bad on anyone but i'm not complaining about skyrocketing increase rates. Only debt I have is locked in for 4.5 more years and I will never renew the mortgage anyway. The good side is way better interest on my money.

 

[Cyle]

Used diesel truck > savings account

Not if you can make enough extra in interest in a few years to pay for that truck.....

With a regular 5 year fixed being over 5%, private lending at 10%+ isn't nearly as bad and it's a hell of a return.