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  • Jun 21st, 2018 9:57 am
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Deal Addict
Feb 23, 2009
1128 posts
1022 upvotes
Oshawa
Oil over $64 and rising.
Wages starting to rise.
That means inflation rising and therefore rates rising.
[OP]
Deal Addict
Feb 22, 2011
3737 posts
3315 upvotes
Toronto
pkrash wrote:
Jan 11th, 2018 11:38 am
Oil over $64 and rising.
Wages starting to rise.
That means inflation rising and therefore rates rising.
Inflation would also impact housing and rent.
Deal Addict
Jul 14, 2002
1442 posts
534 upvotes
real estate are a good hedge against inflation and proved that point over the past decade.
the oxymoron is that "inflation" is still deemed to be low, regardless of the biggest purchase/cash flow of real estate has already grown by leaps and bounds.
essentially refuting the reality that inflation is "low".
Sr. Member
Jun 12, 2007
939 posts
204 upvotes
GTA
Mike15 wrote:
Jan 11th, 2018 9:22 am
Isn't the "gig economy" more often extra income on top of a regular job of some sort? Pretty sure you'd make more full-time at a Tim Horton's in Cobourg than driving UBER full-time.
The "gig economy" is that fewer and fewer companies will offer "full-time permanent" positions, especially the likes of Tim Horton's
Sr. Member
Dec 21, 2013
736 posts
392 upvotes
GTA
datoprookie wrote:
Jan 7th, 2018 11:30 am
The sheep are a fickle bunch.
The "Sheep" are also up 500% for the year Winking Face

The thing with the internet is that information spreads quickly.. so you have to take the Ted Kennedy shoe shining kid story with a bit of modern day salt.
Yes I agree that people are going to take a bath on crypto. But for those who go in early, it's a payday and then some.

Pot stocks will go much higher before it all comes crashing down. In the mind of the average buyer, it's the "end of prohibition".

What a time to be alive. Glad I capitalized on it.
Sr. Member
User avatar
Aug 15, 2013
672 posts
329 upvotes
Guelph
rjg4235 wrote:
Jan 11th, 2018 11:51 am
Inflation would also impact housing and rent.
Technically, its the other way round ie. Housing/rent impacts inflation. Though, our BOC has a magical inflation rate which is pretty much immune to the biggest cost for the common man.
Sr. Member
Sep 19, 2012
504 posts
348 upvotes
Calgary
rjg4235 wrote:
Jan 11th, 2018 11:09 am
Diversifying and investing in tech and green energy has led to a boom in Ontario.
http://nationalpost.com/news/canada/sie ... -jobs-gone

I'm not sure that "green energy" and the FIT subsidies did anything positive for Ontario. In fact, I would say that their handling of the energy file is the "biggest fail of recent history". Well, perhaps not - perhaps the Energy East regulatory fiasco was has a claim to the "biggest fail" championship belt.
Member
May 2, 2017
267 posts
406 upvotes
Source: https://www.theglobeandmail.com/globe-i ... e37584568/

Canada's mortgage-rate trendsetter, Royal Bank of Canada, hiked its posted five-year fixed mortgage rate Thursday.

In days gone by, I never would have written about this. Posted rate changes were no big deal.

Today, they are.

Government regulations now force most Canadians to prove they can afford much higher rates before getting approved for a mortgage. This "stress testing," as it's called, makes RBC's seemingly insignificant rate change quite consequential indeed.

It's been a long time coming

The Bank of Canada's posted five-year fixed rate is used for most mortgage stress testing in this country, and it has been four years since it last exceeded 5 per cent.

RBC's 15-basis-point increase to its posted five-year fixed rate could mark an epoch in Canada's mortgage qualification rate. If a few more Big Six banks follow its lead (and I think they will), the qualification rate will jump from 4.99 per cent today to 5.14 per cent next week, making the stress test even harder.

In fact, mortgage borrowers haven't had to qualify at rates that high since 2008 (back when government stress testing hadn't even started).

Assuming other banks follow RBC, a 5.14-per-cent qualification rate would cut a borrower's buying power (maximum mortgage amount) by roughly 1.4 per cent. For a household making $70,000 a year, that means a $4,000 to $5,000 smaller maximum mortgage. And the actual impact could be even more depending on the borrower's qualifications, contract rate, equity and whether they have default insurance.

Now, $4,000 to $5,000 less "mortgageability" may not sound like much, but when you're bidding against multiple buyers or desperate to consolidate high-interest debt, every $1,000 counts. That's why up to 5 per cent to 10 per cent of uninsured bank borrowers (that is, those with 20-per-cent-plus equity who can't pass the stress test) could migrate to credit unions this year. The higher the banks' five-year fixed rates go, the more borrowers they'll lose to credit unions.

The Bank of Canada's on deck

If bond traders are right, the prime rate will rise 25 basis points after Jan. 17. (A basis point is 1/100th of a percentage point.) That's because markets are pricing in a three-in-four chance the Bank of Canada hikes rates that day.

That, in part, has driven bond yields to four-year highs. And higher bond yields in turn drive higher fixed mortgage rates. But even if you knew higher rates were on the way, it wouldn't help you pick a mortgage.

While traders expected rates to jump 50 to 75 basis points this year – and they very well might – rate expectations change on a dime. For all anyone knows, rates could dive next year or in 2020, thanks to Canada's structurally low inflation, uncertainty over the North American free-trade agreement and housing headwinds, and hypersensitivity to interest rate hikes. That's why your average mortgage rate over five years is far more important than your rate this year.

The best approach to hikes

Forget all the noise, forget your personal rate outlook and focus on risk management. This advice works because long-term rate moves are random and unpredictable.

The central question should be: If your mortgage rate jumps one or two percentage points by the time you renew, can you handle a 5-per-cent to 20-per-cent leap in your payments?

If yes, you can still find variable rates as low as prime minus 1.25 per cent (insured) and prime minus 0.86 per cent (uninsured). Anything better than prime minus 0.70 per cent offers solid risk-reward in this economy.

If you can't comfortably handle a near-term jump in payments, you're probably more suited to a five-year fixed. That's not such a bad thing since the best five-year fixed rates are still below 3 per cent.

But five-year fixed rates below 3 per cent may not be around by year-end. So if you're heavily risk averse or need a preapproval, lock 'em while you got 'em.

Robert McLister is a mortgage planner at intelliMortgage and founder of RateSpy.com. You can follow him on Twitter at @RateSpy
Deal Fanatic
May 29, 2006
8898 posts
1619 upvotes
hey folks, I'm 2 years in on a 5 year variable mortgage with BMO, can this be switched to a fixed rate without penalty? with the recent rate hikes, and next week's rate hike, my variable is not looking so hot anymore.
Deal Fanatic
May 29, 2006
8898 posts
1619 upvotes
my rate is prime - 0.81, I'm in Alberta, 322k remaining on balance, value is around 550k, renewal date is sep 1st, 2020.
Sr. Member
Jul 3, 2007
790 posts
950 upvotes
wheres all the "government will never let rates rise" people lol..... had to crack up every time I heard that one
Member
May 2, 2017
267 posts
406 upvotes
Looks like more banks raised their rates today following RBC yesterday.

Cibc hikes posted fixed:

1yr: 3.14% to 3.29%
2yr: 3.09% to 3.24%
3yr: 3.54% to 3.64%
4yr:4.19% to 4.29%
5yr:4.89% to 4.99%
7yr: 5.95% to 6.05%
10yr: 6.19% to 6.29%

It hikes "special" fixed:

4yr: 3.29% to 3.39%
7yr: 3.49% to 3.59%

TD_Canada hikes fixed:
3yr special: From 3.24% to 3.34%
4yr special: From 3.34% to 3.44%
5yr posted: From 4.99% to 5.14%

HSBC_CA hikes:

5yr fixed 15 bps to 3.14%
Variable 10 bps to prime - .76%


Source: https://twitter.com/RateSpy
Deal Fanatic
May 31, 2007
5000 posts
2105 upvotes
rocking23nf wrote:
Jan 12th, 2018 10:50 am
hey folks, I'm 2 years in on a 5 year variable mortgage with BMO, can this be switched to a fixed rate without penalty? with the recent rate hikes, and next week's rate hike, my variable is not looking so hot anymore.
Yes usually (check your contract) but unfortunately the bank will likely offer you much a higher fixed rate, and probably not competitive either. So you would have to see what they offer you, then do some math and check if it's worth it.

I'm going to guess they will offer you a fixed rate about .75-1% higher than your your variable. So to break even you might need 3-4 rate hikes from BOC.
[OP]
Deal Addict
Feb 22, 2011
3737 posts
3315 upvotes
Toronto
joepipe wrote:
Jan 12th, 2018 11:08 am
wheres all the "government will never let rates rise" people lol..... had to crack up every time I heard that one
I don't think a single person in this thread said they would never rise.
Deal Fanatic
May 31, 2007
5000 posts
2105 upvotes
ud8077 wrote:
Jan 12th, 2018 11:17 am
Looks like more banks raised their rates today following RBC yesterday.

Cibc hikes posted fixed:

1yr: 3.14% to 3.29%
2yr: 3.09% to 3.24%
3yr: 3.54% to 3.64%
4yr:4.19% to 4.29%
5yr:4.89% to 4.99%
7yr: 5.95% to 6.05%
10yr: 6.19% to 6.29%

It hikes "special" fixed:

4yr: 3.29% to 3.39%
7yr: 3.49% to 3.59%

TD_Canada hikes fixed:
3yr special: From 3.24% to 3.34%
4yr special: From 3.34% to 3.44%
5yr posted: From 4.99% to 5.14%

HSBC_CA hikes:

5yr fixed 15 bps to 3.14%
Variable 10 bps to prime - .76%


Source: https://twitter.com/RateSpy
Mclister (founder of ratespy) just sold his house..

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