Real Estate

Anyone considering doing a 10 year fixed mortgage

  • Last Updated:
  • Nov 27th, 2021 4:14 pm
[OP]
Member
Dec 8, 2020
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Bc canada

Anyone considering doing a 10 year fixed mortgage

On the Fraser valley here in Bc abbotsford, houses are selling 700,000 over property assessment. I don’t think anybody could afford to have a Mortgage rate hike. I know 10 years have not been popular. But I’m thinking maybe its on the table now and worth considering.
33 replies
Deal Addict
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Sep 4, 2005
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5 year variable always.

Fixed rates always have padding to cover the bank.
Deal Guru
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Sep 14, 2003
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Super_Chicken wrote: 5 year variable always.

Fixed rates always have padding to cover the bank.
Something to consider: variable rates have historically beaten fixed rates, primarily because rates have historically gone down over time. In a market with inflation looming on the horizon like a tsunami, you may not win the day with variable. Given how low the rates are right now, the risk/reward ratio just isn't there anymore.
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Jan 7, 2005
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It takes a lot of rate hikes for fixed to come out ahead. Even when the break-even point for the rate is reached in a rate-hike economy, it also takes quite some time (or never) for the prior savings (prior to rate% hitting break-even), to be lost. The risks of paying more overall, is still higher for fixed.
There are other benefit for variable, including the much more reasonable termination/breaking charges. I can't imaging what IRD panalty looks like on a 10-year fixed.
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Jan 13, 2021
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This is what Garth Turner encourages his readers to do on a weekly basis and we should all listen to him because his prediction record is simply immaculate.
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RSX-S wrote: It takes a lot of rate hikes for fixed to come out ahead. Even when the break-even point for the rate is reached in a rate-hike economy, it also takes quite some time (or never) for the prior savings (prior to rate% hitting break-even), to be lost. The risks of paying more overall, is still higher for fixed.
There are other benefit for variable, including the much more reasonable termination/breaking charges. I can't imaging what IRD panalty looks like on a 10-year fixed.
Exactly.
danfromwaterloo wrote: Something to consider: variable rates have historically beaten fixed rates, primarily because rates have historically gone down over time. In a market with inflation looming on the horizon like a tsunami, you may not win the day with variable. Given how low the rates are right now, the risk/reward ratio just isn't there anymore.
I agree with you. But similar to stocks, everyone and their aunt knows that "rates are increasing". So the banks will have that priced in on their fixed rate.

Plus I'm sure the big 5 (7), all talk with the BOC to guide where the economy is heading, when the rates will be, etc. So they can adjust their fixed rates accordingly.
Sr. Member
Nov 10, 2003
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Concord
Agree with the above. Fixed rarely wins even rates goes up. Rates literally got to spike overnight the day after you sign for you to lose.

That said, I find it very unlikely rate will go to previous highs. They will raise it to stamp inflation a little but given the economical and political uncertainty, it is the gov best interest to keep rates low.

One more bump on the road and North America is going negative like Europe. And you will see housing sky rocket.
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Newbie
Feb 6, 2011
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Toronto
Last December I was preapproved for 2.14% for ten years. Bought a four season cottage. Put down 20%, payments are very comfortable. I would have put down a much higher DP if rates were higher. There have been two small rate increases since, but it still amounts to almost a 50% increase.

Rates can still go a lot higher than lower. The removal of risk is worth it for some situations.
Sr. Member
Dec 28, 2010
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yurong wrote:
There have been two small rate increases since, but it still amounts to almost a 50% increase.

Rates can still go a lot higher than lower. The removal of risk is worth it for some situations.
Sorry 2 rates hikes since last December?
As far I recall, BOC only been dropping rates in last 12+ months...
Newbie
Feb 6, 2011
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Sorry, Tangerine put their 10 year rate up to 2.8#% and then up again 3.09%.
[OP]
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Dec 8, 2020
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Bc canada
Where are you located to get a rate like 2.14?? Id break my mortgage to get that all day long..
Newbie
Feb 6, 2011
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Dejavudiva wrote: Where are you located to get a rate like 2.14?? Id break my mortgage to get that all day long..
Tangerine in Ontario, but they are Canada wide.

https://www.tangerine.ca/en/rates/historical-rates

10 Year Fixed Mortgage

March 16, 2021 3.09%
March 3, 2021 2.84%
November 19, 2020 2.14%
September 15, 2020 2.49%
July 31, 2020 2.59%
April 25, 2020 3.09%
March 20, 2020 3.29%
March 17, 2020 2.99%
March 6, 2020 2.79%
February 20, 2020 2.99%
August 2, 2019 3.19%
June 7, 2019 3.49%
May 3, 2019 3.69%
March 26, 2019 3.79%
January 19, 2019 3.99%
November 28, 2018 4.19%
October 25, 2018 4.09%
Deal Expert
Feb 29, 2008
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Tarrana & The Ri…
yurong wrote: Last December I was preapproved for 2.14% for ten years. Bought a four season cottage. Put down 20%, payments are very comfortable. I would have put down a much higher DP if rates were higher. There have been two small rate increases since, but it still amounts to almost a 50% increase.

Rates can still go a lot higher than lower. The removal of risk is worth it for some situations.
I would lock in at 2% for 10 years if I could.
[OP]
Member
Dec 8, 2020
320 posts
118 upvotes
Bc canada
yurong wrote: Tangerine in Ontario, but they are Canada wide.

https://www.tangerine.ca/en/rates/historical-rates

10 Year Fixed Mortgage

March 16, 2021 3.09%
March 3, 2021 2.84%
November 19, 2020 2.14%
September 15, 2020 2.49%
July 31, 2020 2.59%
April 25, 2020 3.09%
March 20, 2020 3.29%
March 17, 2020 2.99%
March 6, 2020 2.79%
February 20, 2020 2.99%
August 2, 2019 3.19%
June 7, 2019 3.49%
May 3, 2019 3.69%
March 26, 2019 3.79%
January 19, 2019 3.99%
November 28, 2018 4.19%
October 25, 2018 4.09%
Considering im paying for 3.4 for 5…
[OP]
Member
Dec 8, 2020
320 posts
118 upvotes
Bc canada
yurong wrote: Tangerine in Ontario, but they are Canada wide.

https://www.tangerine.ca/en/rates/historical-rates

10 Year Fixed Mortgage

March 16, 2021 3.09%
March 3, 2021 2.84%
November 19, 2020 2.14%
September 15, 2020 2.49%
July 31, 2020 2.59%
April 25, 2020 3.09%
March 20, 2020 3.29%
March 17, 2020 2.99%
March 6, 2020 2.79%
February 20, 2020 2.99%
August 2, 2019 3.19%
June 7, 2019 3.49%
May 3, 2019 3.69%
March 26, 2019 3.79%
January 19, 2019 3.99%
November 28, 2018 4.19%
October 25, 2018 4.09%
Considering im paying for 3.4 for 5…
Member
Sep 27, 2021
424 posts
460 upvotes
Problem is 10 year is a long time. You might want to break it before 10 years. And the penalty is too big for 7 and 10 year fixed.
Deal Fanatic
Dec 11, 2003
8440 posts
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I think after 5 years, the penalty to break is like 3 months of interest.

I think the boat has sailed - there was a point 10 fixed is like 2%. At the current rate it is not worth it.
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Deal Fanatic
Nov 23, 2008
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Karma2000 wrote: Sorry 2 rates hikes since last December?
As far I recall, BOC only been dropping rates in last 12+ months...
If I'm not mistaken, fixed rates at banks don't really reflect the BOC overnight rate

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