Interest rate hikes - question... - RedFlagDeals.com Forums

Mar 3rd, 2022 4:53 pm

#1

d_Ave [OP]: Sr. Member; Feb 19, 2007; 807 posts; 83 upvotes

Mar 3rd, 2022 4:53 pm

Interest rate hikes - question...

With BOC increasing rates and mortgage rates going up... do people feel owners should lock in on their mortgage or stay variable?

Currently I have a mortgage rate of 1.4% variable and was quote 2.8% to lock in 5 yr.

My, albeit limited, understanding is that BOC is unlikely to do a massive hike as it would put a great population of people on the streets that are heavily leveraged.

Thoughts?

Mar 3rd, 2022 4:56 pm

#2

lolbeast: Deal Addict; Apr 29, 2010; 1527 posts; 3046 upvotes; GTA

Mar 3rd, 2022 4:56 pm

My thoughts are people who choose fixed are either uninformed *

Last edited by MrDisco on Mar 3rd, 2022 10:34 pm, edited 1 time in total.
Reason: rude

+7

Mar 3rd, 2022 5:07 pm

#3

GTA12345: Deal Addict; Jun 18, 2020; 3005 posts; 3619 upvotes

Mar 3rd, 2022 5:07 pm

d_Ave wrote: ↑ With BOC increasing rates and mortgage rates going up... do people feel owners should lock in on their mortgage or stay variable?

Currently I have a mortgage rate of 1.4% variable and was quote 2.8% to lock in 5 yr.

My, albeit limited, understanding is that BOC is unlikely to do a massive hike as it would put a great population of people on the streets that are heavily leveraged.

Thoughts?

Was the 2.8 offer from a big 5 bank?

Mar 3rd, 2022 5:08 pm

#4

d_Ave [OP]: Sr. Member; Feb 19, 2007; 807 posts; 83 upvotes

Mar 3rd, 2022 5:08 pm

GTA12345 wrote: ↑ Was the 2.8 offer from a big 5 bank?

MCAP

+1

Mar 3rd, 2022 5:25 pm

#5

teoconca: Deal Guru; Oct 16, 2008; 10295 posts; 4555 upvotes; Maple

Mar 3rd, 2022 5:25 pm

d_Ave wrote: ↑ With BOC increasing rates and mortgage rates going up... do people feel owners should lock in on their mortgage or stay variable?

Currently I have a mortgage rate of 1.4% variable and was quote 2.8% to lock in 5 yr.

My, albeit limited, understanding is that BOC is unlikely to do a massive hike as it would put a great population of people on the streets that are heavily leveraged.

Thoughts?

Each person is different, each case is different, each level of comfort is different.

I recommend to compare pros vs cons for variable vs fixed. Then find out your comfort level.

It was only 1 hike since 2018, so many people are panics!

...

+1

Mar 3rd, 2022 7:31 pm

#6

Piklishi: Deal Addict; Jul 25, 2015; 2141 posts; 1900 upvotes; Burnaby, BC

Mar 3rd, 2022 7:31 pm

I personally prefer the variable.

+2

Mar 3rd, 2022 7:42 pm

#7

9Hangovers: Jr. Member; Jan 31, 2020; 111 posts; 236 upvotes

Mar 3rd, 2022 7:42 pm

You’re 100% correct though .

Rookies love to say “I just like knowing my exact payment “ …. When in reality you’re a sucker who’s paying less principal and more interest …. And you have a much greater penalty to break your mortgage .

Bankers love selling fixed mortgages to the uneducated

+9

Mar 3rd, 2022 7:42 pm

#8

Newuserid: Deal Addict; Jan 5, 2020; 1066 posts; 1534 upvotes

Mar 3rd, 2022 7:42 pm

lolbeast wrote: ↑My thoughts are people who choose fixed are either uninformed *

What if they locked in 1.5% fixed rate at the height of the pandemic?

Last edited by MrDisco on Mar 3rd, 2022 10:35 pm, edited 1 time in total.
Reason: quote was edited

+2

Mar 3rd, 2022 9:20 pm

#9

rfd911: Member; Oct 6, 2017; 393 posts; 442 upvotes

Mar 3rd, 2022 9:20 pm

Variable with fixed monthly payment. Best of both worlds!

+1

Mar 3rd, 2022 9:25 pm

#10

teoconca: Deal Guru; Oct 16, 2008; 10295 posts; 4555 upvotes; Maple

Mar 3rd, 2022 9:25 pm

9Hangovers wrote: ↑ You’re 100% correct though .

Rookies love to say “I just like knowing my exact payment “ …. When in reality you’re a sucker who’s paying less principal and more interest …. And you have a much greater penalty to break your mortgage .

Bankers love selling fixed mortgages to the uneducated

Yeah, my 1st 5-years term of my 1st mortgage was fixed. Nothing was wrong with that; I prefered know exact amount. I was learning the rope. My next 2 terms were variable as I knew the process and I learnt to be more risky.

...

+1

Mar 3rd, 2022 9:40 pm

#11

lolbeast: Deal Addict; Apr 29, 2010; 1527 posts; 3046 upvotes; GTA

Mar 3rd, 2022 9:40 pm

Newuserid wrote: ↑ What if they locked in 1.5% fixed rate at the height of the pandemic?

Either you are a genius or pretty lucky. Thats a great rate! Congrats

Mar 3rd, 2022 10:16 pm

#12

StatikIEV: Sr. Member; Dec 14, 2021; 515 posts; 1256 upvotes

Mar 3rd, 2022 10:16 pm

lolbeast wrote: ↑ Either you are a genius or pretty lucky. Thats a great rate! Congrats

Yeah, who could have known rates were going to go up?

Next someone is going to say we are probably going to see a RE top now...just because of the multiple incoming rate hikes that started this month, runaway inflation, 1.75 gas and the fact we are coming off near 100 percent gains the last 2 years.

+2

Mar 3rd, 2022 10:37 pm

#13

skyrink: Deal Addict; Nov 4, 2007; 1828 posts; 1411 upvotes; Toronto

Mar 3rd, 2022 10:37 pm

I was very lucky to lock in at 1.4% 5-year fixed about 13 months ago...but with a smaller mortgage company with no HELOC eligibility.

If I were to buy now, I’d go and stay variable!

Mar 3rd, 2022 11:01 pm

#14

rfd911: Member; Oct 6, 2017; 393 posts; 442 upvotes

Mar 3rd, 2022 11:01 pm

lolbeast wrote: ↑ Either you are a genius or pretty lucky. Thats a great rate! Congrats

I locked in at 1.64% fixed on one of my rentals last year in March. I guess I'm almost a genius

Mar 3rd, 2022 11:04 pm

#15

WinterSleep: Deal Addict; Jan 26, 2016; 2232 posts; 2262 upvotes; Toronto, ON

Mar 3rd, 2022 11:04 pm

skyrink wrote: ↑ I was very lucky to lock in at 1.4% 5-year fixed about 13 months ago...but with a smaller mortgage company with no HELOC eligibility.

If I were to buy now, I’d go and stay variable!

Probably paid CMHC insurance to get that which means your effective rate is much higher

Mar 4th, 2022 12:10 am

#16

lolbeast: Deal Addict; Apr 29, 2010; 1527 posts; 3046 upvotes; GTA

Mar 4th, 2022 12:10 am

StatikIEV wrote: ↑ Yeah, who could have known rates were going to go up?

Next someone is going to say we are probably going to see a RE top now...just because of the multiple incoming rate hikes that started this month, runaway inflation, 1.75 gas and the fact we are coming off near 100 percent gains the last 2 years.

We all knew rates were going up. But at the time those fixed rates were offered, nobody knew when the central bank and mortgage lenders would be raising them.

Also, RE to the moon. Top my butthole.

Mar 4th, 2022 8:15 am

#17

skyrink: Deal Addict; Nov 4, 2007; 1828 posts; 1411 upvotes; Toronto

Mar 4th, 2022 8:15 am

WinterSleep wrote: ↑ Probably paid CMHC insurance to get that which means your effective rate is much higher

Nope, I put 25% down payment to avoid the CMHC

+1

Mar 4th, 2022 9:13 am

#18

d_Ave [OP]: Sr. Member; Feb 19, 2007; 807 posts; 83 upvotes

Mar 4th, 2022 9:13 am

Thanks for the responses!

I think I will stay variable and keep an eye on things.

Mar 4th, 2022 9:34 am

#19

JayLove06: Deal Expert; Feb 29, 2008; 19639 posts; 18183 upvotes; Tarrana & The Ri…

Mar 4th, 2022 9:34 am

lolbeast wrote: ↑ We all knew rates were going up. But at the time those fixed rates were offered, nobody knew when the central bank and mortgage lenders would be raising them.

Also, RE to the moon. Top my butthole.

I think that’s what will happen. Even with all these threats of 5 more hikes this year. There will be a lul but we will see prices rising again long term. If gas prices remain high for some time, we will see even more people move downtown.

Hopefully detached prices can come down. The last 2 years of insanity need to end.

Mar 4th, 2022 10:32 am

#20

Dejavudiva: Member; Dec 8, 2020; 453 posts; 204 upvotes; Bc canada

Mar 4th, 2022 10:32 am

I feel with this Russia war nonsense will force canada to keep the rates low. The economy will be too unstable. People will struggle to pay The high cost of gas and food. And then to have to pay the higher interests when they are already at the tipping edge? I don’t see another 80s rerun. It would just crash the economy. And nobody would win.

+3

Interest rate hikes - question...

Interest rate hikes - question...

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