Mortgage rates on the rise as lending rates are cut

Yes I read that today,, buggers. And I’m up at work and couldn’t take advantage of it when it was down. We will see next week what happens.
 
Hmmm...I always thought mortgage rates are more tied to bonds yields. Risk in bonds goes up, mortgages goes up while the BoC over night lending rates is more around the banks short term liquidity needs.

I remember my first mortgage @ 7.25% and I thought that was a heck of a deal. Seeing these sub 3%rates for what seems like a long time..wow.
 
And you still gotta pay your interest if you defer your mortgage. Thanks for the favour Trudeau
 
ab1752 said:
Hmmm...I always thought mortgage rates are more tied to bonds yields. Risk in bonds goes up, mortgages goes up while the BoC over night lending rates is more around the banks short term liquidity needs.

I remember my first mortgage @ 7.25% and I thought that was a heck of a deal. Seeing these sub 3%rates for what seems like a long time..wow.
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My first mortgage on a brand new house I built was 8.75%........but it was also only 100k.....that's the big difference. Most folks houses are now 10 times that amount. Banks don't need to make the big cake and it feeds into the whole "free money" campaign.
 
Vancouver people, would you buy a condo in Vancouver proper in the next few weeks? My son got out bid 3 weeks ago and is still looking, mostly online of course. I'd wait, but it's his money (minus a tiny interest free loan from bank of mom). He and his wife are working from home and think their jobs are stable.
 
tubber said:
Vancouver people, would you buy a condo in Vancouver proper in the next few weeks? My son got out bid 3 weeks ago and is still looking, mostly online of course. I'd wait, but it's his money (minus a tiny interest free loan from bank of mom). He and his wife are working from home and think their jobs are stable.
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We have a very close friend in real estate on the north shore. She says things are totally locked up with the worst yet to come. If your son can stay on the side lines for another quarter or 2, the timing could very well work to his advantage.
 
If it were me and I could wait. I’d wait. I work for developers mostly, while some that are mid project are full steam ahead. My largest client just closed a massive land deal last month. They just starting clearing it in preparation of blasting etc. They called me two days ago to tell me they’re shutting down and holding tight to their remaining cash. They expect a big dip in the market, I do as well.
 
Thanks guys. They've been renting for about 6 years saving and lots of travelling. I thought they would be lifers doing that routine, but they can do math. They dumped some investments to have cash on hand, which in hindsight saved them a bit when it slid some more afterward. We'll see what they say on the Skype tomorrow.
 
tubber said:
Thanks guys. They've been renting for about 6 years saving and lots of travelling. I thought they would be lifers doing that routine, but they can do math. They dumped some investments to have cash on hand, which in hindsight saved them a bit when it slid some more afterward. We'll see what they say on the Skype tomorrow.
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I would not be touching a condo these days with whats been going on with insurance. If they do make sure its insurable and not cost an arm and a leg to insure it.
 
I don’t think buying a condo in Vancouver is ever a bad thing. I’ve heard opinions from people for 15 years that things are going to drop. While assessments have dropped that last 2 years the fact is the market has not crashed. It went nuts in 2017 then landed softly in 18/19. Up until 2 weeks ago sales were up over last year. There is a working theory there may be a huge influx of Asian buyers who’ve had enough of the issues in China/Hong Kong. If that happens, the market will be influenced. Also, hard to beat financing costs right now with HSBC offering a 3 year fixed at 1.99. Personally I’d buy right now.
 
I read an article that said the market would go up due to fewer listings and still lots of buyers, go down due to drop in the economy, or stay about the same. super helpful.
They offered 10% over on the one they lost out on a few weeks back. Inspector $ down the drain.
Some of the Asian buyers would like to see schools and unis open before buying I would think.
 
tubber said:
Vancouver people, would you buy a condo in Vancouver proper in the next few weeks? My son got out bid 3 weeks ago and is still looking, mostly online of course. I'd wait, but it's his money (minus a tiny interest free loan from bank of mom). He and his wife are working from home and think their jobs are stable.
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I would buy 3 in chilliwack
 
The strata insurance issue is legit and has been brewing in that industry for quite some time. Now that stratas haven't been able to obtain, or afford, suitable insurance renewals they headed to the press to put some pressure on the provincial for assistance.

I think staying on the sidelines in 2020 is a smart plan. Between the insurance matter and the pandemic these are unprecedented market pressures that will take time to unravel. Many folks are leveraged at values prior to these issues and with job security top of mind who knows where this could go.

Just remember there are 3 sides to every story and filter out the irrelevant noise around the market segment that's appropriate to their budge . What's happening in the West Van single family market isnt the same as one bedroom condos in the Olympic village.

Good luck.
 
An example of the Victoria Realestate market. My son made an offer $56K more than asking on a $1.1 mil. house on 1 1/2 acres. It went for $250 K over asking last week.Nuts in these very uncertain times.
 
ab1752 said:
Hmmm...I always thought mortgage rates are more tied to bonds yields. Risk in bonds goes up, mortgages goes up while the BoC over night lending rates is more around the banks short term liquidity needs.

I remember my first mortgage @ 7.25% and I thought that was a heck of a deal. Seeing these sub 3%rates for what seems like a long time..wow.
Click to expand...

yes, Does not make sense why the are raising the rate, maybe they are raising it to cover cost of increased risk?

"Canada’s 5-year bond yield is the basis for most long-term fixed mortgage rates. It’s a key benchmark in the Canadian bond market and fluctuates daily."

https://www.ratespy.com/5-year-canada-bond-yield
 
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