Real Estate

RFD poll. Thoughts on negative rates in Canada?

  • Last Updated:
  • Apr 5th, 2020 2:16 pm

Poll: Thoughts on negative rates in Canada?

  • Total votes: 45. You have voted on this poll.
It's possible, within the next 0-2 months
 
9
20%
It's possible, within the next 3-6 months
 
9
20%
It's possible, within the next 7-12 months
 
8
18%
It's possible, within the next 13-18 months
 
5
11%
It's not possible at all lock in fixed rates now!!
 
14
31%
[OP]
Member
May 18, 2007
264 posts
422 upvotes

RFD poll. Thoughts on negative rates in Canada?

With the job losses mounting and the Bank of Canada's rate near 0%, it does not leave many options left. What are your thoughts on where rates are heading?
To clarify, the poll is in regards to the Bank of Canada's rate. The banks would add their own spreads to their prime rates.
Last edited by wonginator on Apr 5th, 2020 2:16 pm, edited 1 time in total.
13 replies
Deal Addict
Jan 26, 2016
1772 posts
1681 upvotes
Toronto, ON
Will the banks pass on the savings if you have variable? Probably not.
Will fixed rates go lower? Not really, as the banks will need to increase those to make up lost revenue.

I'd lock in.
Deal Addict
Feb 4, 2010
4318 posts
3095 upvotes
Currently I have a 5 year fixed rate of 2.49% and I'm fairly confident that I'll be paying less than that when it comes time to renew next year. I would actually consider getting a 10-year fixed rate and then just pay off my mortgage.
Deal Addict
Oct 6, 2015
2463 posts
1372 upvotes
Even 0% is too much to pay on a rapidly deflating asset.
Deal Guru
Feb 22, 2011
10175 posts
12596 upvotes
Toronto
Of course it's possible it exists in other countries and we aren't special or unique. The question is if they will resort to it which no one knows.
Deal Addict
Feb 16, 2013
1546 posts
1273 upvotes
Toronto
So the bank will pay you to own a house? Which universe are you people from?
....
Deal Expert
Aug 2, 2001
16690 posts
6937 upvotes
cowbunpants wrote: So the bank will pay you to own a house? Which universe are you people from?
https://www.theguardian.com/money/2019/ ... e-mortgage

A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year.

Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned.

Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.

Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.
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“We don’t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,” said Jyske’s housing economist, Mikkel Høegh.
Deal Addict
Feb 16, 2013
1546 posts
1273 upvotes
Toronto
TrevorK wrote: https://www.theguardian.com/money/2019/ ... e-mortgage

A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year.

Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned.

Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.

Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.
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“We don’t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,” said Jyske’s housing economist, Mikkel Høegh.
Sounds great.
Get a renter. Get them to pay 2000 a month.
Get twilight-zone reverse mortgage.
Profit.
Government should also take out reverse bonds.
Financial crisis solved.
Easy money for all.
....
Member
Aug 22, 2016
465 posts
260 upvotes
none. I would prefer going variable as that will stay the lowest for long time to come.
Deal Addict
User avatar
Jul 8, 2010
1406 posts
1098 upvotes
Ontario
wonginator wrote: With the job losses mounting and the Bank of Canada's rate near 0%, it does not leave many options left. What are your thoughts on where rates are heading?
This poll needs more clarifications. I guess you refer to mortgage rates that will be available to end user, if those will be negative in Canada. The answer will be straight no.
If you are looking for BoC rate , that may go negative soon. But even this one needs deeper diving into details.
Member
User avatar
Jun 28, 2018
252 posts
297 upvotes
Aurora, Ontario
I went variable in 2018. My rate now is 1.55%. If I went fixed it would have been %3.55. No lender will give you prime -0.9 now though. I would go fixed now if you’re locking in for 5 years. BoC will start jacking up rates as soon as this crisis is over.
Member
Jun 15, 2015
424 posts
457 upvotes
Thornhill, ON
I expect another 0.5% reduction by BOC soon. That will lead to a prime rate cut to 1.95% at the big banks. My variable rates will then be .95%. Not bad.
[OP]
Member
May 18, 2007
264 posts
422 upvotes
Isostar wrote: This poll needs more clarifications. I guess you refer to mortgage rates that will be available to end user, if those will be negative in Canada. The answer will be straight no.
If you are looking for BoC rate , that may go negative soon. But even this one needs deeper diving into details.
I have edited the poll to clarify this is in regards to BoC's rate

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