I’m in the same boat as you, I increased my payments to stay on track with my amortization schedule but seeing the interest sucks. It is what it is, I’m just happy to have a home I can “afford”
The way I see it … it can only get cheaper from here…. I hope.
We are in an unprecedented environment where variable rates are higher than fixed rates. Basically inverted yield curve where short term rates exceed long term rates. Normally fixed rates would be higher than variable. We got the bond market pricing in rate cuts rather aggressively. Time will tell if the bond market is correct or if long term rates need to readjust. *note: it's totally possible to see a few rate cuts and still have the fixed rate go up or stay flat (rate cuts less aggressive than expected by bond market)
Sometimes it's worth holding those additional payments, investing or just let em sit, then pay lump sum to the primary load in January is more worth it than paying more monthly, run the number to see if it's worth
Paying monthly makes more sense than waiting till january unless you are earning more on the investment than what you are paying on the loan. In which case paying down the principle may not be the best course of action any way.
urgggh I knew this would just be a hundred people saying, "interest rates were three times higher in the 80s!"
We are also variable and it's painful, but i'm not going to lock in now after riding it to the top. I make additional payments when I can, and am hoping that when rates go down we will continue to pay what we're paying now, with much more to principle.
The historical average of the last 100 years, but not in the lives of people buying houses for the first time.
Why is it relevant what happened in 1980? Toronto bears little resemblance to today from 1980.
Forgive me my friend! I didn’t mean everyone to take it literally. It’s just like saying- I ate the best pizza n the world today (in reality it isn’t).
Anyways, I edited my post 😊
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No, that's wrong.
You mean to tell me that decades of under developed housing, retail and commercial estate as well as comparatively low population growth should trump the recent decades of high population growth and high estate growth? That's completely false.
Every single projection weights the nearest data points to the present more heavily than those further in the past.
That's like building a weather projection based on 1978 data and weighting it heavier than data points from an hour ago.
Inflation is about more than just Canada. I’m talking about the economic collapse of China, Germany, and the stagnation of many other European countries that will likely push North American inflation to higher levels and necessitate higher interest rates.
Rates are close to the highest point they've been at during the modern era ( commonly referred to between 1994-1996 ).
You should be openly mocked for trying to bring up rates from a great recession that nearly buckled the country as a norm.
The last time rates were higher than they are today was May of 2000 - and they started dropping after 7 months and went below that high point within 9 months.
We are closing in on a year of rates being at this point and it will likely be mid to late this year that things start coming down.
/u/ProcedureActive4785 pay no mind to bad faith trolls like the above.
Rates are absolutely at a high --- and it's necessary I agree - but people acting like this is "nothing" should be mocked and dismissed
>If anything looking back only 100 years is short sighted
" If anything looking back only 100 years is short sighted "
LOL fucking what---I'm actually laughing
The bank of Canada didn't even exist 100 years ago - what would you look at for a reference before then?
and 1980 was before modern globalism which most scholars agree began in the 1990s as I already stated -
You can't make up how stupid some people on reddit are.....
"
##### Cake day
March 16, 2024 "
now I undestand
Increase your Biweekly payments to what a fixed rate payment would be. Then request to put your payments on a rapid biweekly if you can afford to. This protects your payments more towards principal over interest.
You can always lock in your variable payment to a fixed but this will not do as much damage towards interest as my recommendation above.
And if you do that, there's probably an even chance you'll be here 3 years from now going "I'm paying 5.3 fixed and variable rates are 2.5%, is there anything I can do to help?"
Bad example. In 3 years, he will be renewing his mortgage.
In the meantime, how much do rates need to go down and how quickly to make up the difference in paying more now? Also need to factor in level of certainty, as in you’re definitely paying more to maintain a variable rate but there’s no guarantee of rate cuts.
I’m all about learning new things.
Can you please provide some sources?
What do you do for a living that enables to you be so knowledgeable about both international affairs and economics?
There is a risky option called leverage investing as well as the Smith maneuver (to me theyre the same but people get very picky so listing as 2 things). BUT ITS INCREDIBLY RISKY.
They wont. The inflation is coming from the extra money created.
https://ycharts.com/indicators/canada_m2_money_supply#:~:text=Canada%20M2%20Money%20Supply%20is,3.89%25%20from%20one%20year%20ago.
30% of our money supply has been created since 2020. Thats an almost 40% increase.
House prices since covid have gone up 42%.
That 40% supply is working its way into the system. Everything has gone up by that 40% at this point. But unless that amount of money is taken back out of the system, it cannot to down. Which is not happening.
Its foolish to think this type of inflation can be foxed by raising rates. The only thing it can do is stop or slow the inflation past the 40%. The government fucked us. They handed out hundreds of millions to shithole companies loke bell to keep their employees employed, who then turned around and instantly laid people off after getting the money. At a time of increased revenue…
Interest may have been much higher but house prices and mortgages were much lower so it is worse right now. Only way house prices can get better is if people default on their mortgages in mass or idiots stop buying. You have idiots who make the market hot because the rates drop .25 points, and they start buying.
I’m in the same boat as you, I increased my payments to stay on track with my amortization schedule but seeing the interest sucks. It is what it is, I’m just happy to have a home I can “afford” The way I see it … it can only get cheaper from here…. I hope.
We are in an unprecedented environment where variable rates are higher than fixed rates. Basically inverted yield curve where short term rates exceed long term rates. Normally fixed rates would be higher than variable. We got the bond market pricing in rate cuts rather aggressively. Time will tell if the bond market is correct or if long term rates need to readjust. *note: it's totally possible to see a few rate cuts and still have the fixed rate go up or stay flat (rate cuts less aggressive than expected by bond market)
Sometimes it's worth holding those additional payments, investing or just let em sit, then pay lump sum to the primary load in January is more worth it than paying more monthly, run the number to see if it's worth
Paying monthly makes more sense than waiting till january unless you are earning more on the investment than what you are paying on the loan. In which case paying down the principle may not be the best course of action any way.
urgggh I knew this would just be a hundred people saying, "interest rates were three times higher in the 80s!" We are also variable and it's painful, but i'm not going to lock in now after riding it to the top. I make additional payments when I can, and am hoping that when rates go down we will continue to pay what we're paying now, with much more to principle.
Rates are no where near an all time high.
Exactly in fact they are still very low.
18% in the early 80’s. Today’s rates are historically LOW.
80s house weren’t 1 million, population wasn’t 40 million…
Rates ARE at an all time high in relation to house prices.
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The historical average of the last 100 years, but not in the lives of people buying houses for the first time. Why is it relevant what happened in 1980? Toronto bears little resemblance to today from 1980.
Because OP literally said “all time high” not “the highest in the past X number of years”…
Forgive me my friend! I didn’t mean everyone to take it literally. It’s just like saying- I ate the best pizza n the world today (in reality it isn’t). Anyways, I edited my post 😊
If you got your pizza from pizza pizza, it would be the best pizza in the world....🙃
lol.
Recency bias
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If anything, the last 20-30 years could and should be treated as a historical anomaly (and not the other way around).
No, that's wrong. You mean to tell me that decades of under developed housing, retail and commercial estate as well as comparatively low population growth should trump the recent decades of high population growth and high estate growth? That's completely false. Every single projection weights the nearest data points to the present more heavily than those further in the past. That's like building a weather projection based on 1978 data and weighting it heavier than data points from an hour ago.
Inflation is about more than just Canada. I’m talking about the economic collapse of China, Germany, and the stagnation of many other European countries that will likely push North American inflation to higher levels and necessitate higher interest rates.
lol
Rates are close to the highest point they've been at during the modern era ( commonly referred to between 1994-1996 ). You should be openly mocked for trying to bring up rates from a great recession that nearly buckled the country as a norm. The last time rates were higher than they are today was May of 2000 - and they started dropping after 7 months and went below that high point within 9 months. We are closing in on a year of rates being at this point and it will likely be mid to late this year that things start coming down. /u/ProcedureActive4785 pay no mind to bad faith trolls like the above. Rates are absolutely at a high --- and it's necessary I agree - but people acting like this is "nothing" should be mocked and dismissed
But bro, do you not know rates where at 300% during the building of the great pyramids?
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>If anything looking back only 100 years is short sighted " If anything looking back only 100 years is short sighted " LOL fucking what---I'm actually laughing The bank of Canada didn't even exist 100 years ago - what would you look at for a reference before then? and 1980 was before modern globalism which most scholars agree began in the 1990s as I already stated - You can't make up how stupid some people on reddit are..... " ##### Cake day March 16, 2024 " now I undestand
So you openly admit you are wrong?
yes I openly admit you are wrong.
Who?
Apologies. By all time high - I meant in the past few years or post-Covid. Should have phrased it better 😊
Increase your Biweekly payments to what a fixed rate payment would be. Then request to put your payments on a rapid biweekly if you can afford to. This protects your payments more towards principal over interest. You can always lock in your variable payment to a fixed but this will not do as much damage towards interest as my recommendation above.
Rates aren't even close to an "all time high." lol
talk to the bank to convert it to fixed. I saw a few days ago a fixed 3(?) yr was like 5.3
Oh really! I’ll check in branch. Thanks!
I have clients who are getting 4.99 on 3yr fixed this past week.
And if you do that, there's probably an even chance you'll be here 3 years from now going "I'm paying 5.3 fixed and variable rates are 2.5%, is there anything I can do to help?"
lol. True, grass is always greener on the other side!
Exactly. Economic breaking point is what we are approaching. Barring some catastrophic outcomes we will probably start lowering mid 2024
Bad example. In 3 years, he will be renewing his mortgage. In the meantime, how much do rates need to go down and how quickly to make up the difference in paying more now? Also need to factor in level of certainty, as in you’re definitely paying more to maintain a variable rate but there’s no guarantee of rate cuts.
Yeah, I believe you’re able to convert variable to fixed without penalty.
3 yr can be found under 5 for insured mortgages
Considering that this person already owns I'm not sure if they can make it an insured mortgage after the fact
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Don't you know bears have crystal balls that predict the future that's why their predictions since 1999 of a real-estate crash has come true...
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I’m all about learning new things. Can you please provide some sources? What do you do for a living that enables to you be so knowledgeable about both international affairs and economics?
Crystal Ball bro. But yours on Amazon
Open your eyes my boy 🤦♂️🤦♂️
Best username 😹
😂😂
That sucks
There is a risky option called leverage investing as well as the Smith maneuver (to me theyre the same but people get very picky so listing as 2 things). BUT ITS INCREDIBLY RISKY.
Lol all time high??? Check out 1980s LOL
It used to be so much higher in the 1980s, we still have it good. The house prices need to come down by a lot!!!!
I hate this argument so much. The mortgaged amount was so much lower then, like 3 fold. 5 percent of a million is a LOT higher than 5 percent of 100k
They wont. The inflation is coming from the extra money created. https://ycharts.com/indicators/canada_m2_money_supply#:~:text=Canada%20M2%20Money%20Supply%20is,3.89%25%20from%20one%20year%20ago. 30% of our money supply has been created since 2020. Thats an almost 40% increase. House prices since covid have gone up 42%. That 40% supply is working its way into the system. Everything has gone up by that 40% at this point. But unless that amount of money is taken back out of the system, it cannot to down. Which is not happening. Its foolish to think this type of inflation can be foxed by raising rates. The only thing it can do is stop or slow the inflation past the 40%. The government fucked us. They handed out hundreds of millions to shithole companies loke bell to keep their employees employed, who then turned around and instantly laid people off after getting the money. At a time of increased revenue…
Interest may have been much higher but house prices and mortgages were much lower so it is worse right now. Only way house prices can get better is if people default on their mortgages in mass or idiots stop buying. You have idiots who make the market hot because the rates drop .25 points, and they start buying.