Mortgage rates on the rise as lending rates are cut

Derby said:
My first mortgage would have been a 12.5 % o_O
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Yup. In the early 80's a mortgage around 12% was a deal. Now, if you consider the cost of living/inflation a decent 1st mortgage is essentially interest free.
 
Real estate is all about location. Vancouver & Victoria will always be good investment in my opinion as they are destination driven. Prices will always be higher the closer to town center, some don’t mind the commute to trade off for a newer home but loose out on yards these days unless you go further like Sooke, Renfrew etc.The mortgage rates don’t have much effect with homes in the city as most of these buyers have the cash, $1,000,000. Homes are considered cheap in these areas. Condo’s are going through a small insurance hiccup now mostly with your contents and deductible Ins but similar to the one 7 yrs ago when the depreciation reports became law and the monthly fees jumped from approx $250 to $350 month. Now those fees are $400 plus but it’s not even questioned. Flipping now may not be great but long term purchasing will be a win. If your thinking of buying takes no time or effort to get a rate lock for 90 days at some amazing rates.
 
Foxsea said:
Expectations for real estate are not good:

https://vancouversun.com/news/covid...-riskier-asset-causing-mortage-rates-to-rise/
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Well, depending on your appetite for risk, it may be the best time to buy in the last 10 years. Love these guys putting a photo of a house somewhere in LA for their story. Real journalists who work for stories are a rare commodity. You’d think they coulda sent out a photog for a real shot. The research they do now is sub optimal. Pick up their cell call two guys for a story isn’t exactly an in-depth analysis for such a complex economic subject. I’ve heard the same story so many times since 2015. It never seems to materialize.
 
pescador said:
...I’ve heard the same story so many times since 2015. It never seems to materialize.
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... until it does.
Even with good equity, if you lose your job or die, you cannot pay a mortgage. The essence of the article is that the market has again been flooded with liquidity, which is inflationary. That, driving up borrowing rates along with additional risk premium for Covid 19 effects, puts upward pressure on mortgage rates. Many buyers could qualify only at these historic low rates. Even a move from 3% to 4% puts many out of the market. Lower sales volume in a buyer's market = lower prices.

Then there are people like me that are retired, with no mortgage. We have a substantial part of our net worth invested in our home. On a fixed pension income but with having other investments hammered and with inflationary pressures in the economy, we may at some point be forced to downsize. Will there be willing buyers for our home at today's prices?

And of course much of real estate price escalation was driven by speculation. When people are worried about the future and offshore investment dries up will speculators leave the market? Especially if they cannot count on more buyers behind them leveraged with low interest rates and inflated equity positions.

Also, the general economy is rapidly moving into recession, some say depression. Corporate earnings will be hit very hard this year and many companies in many industries will be scaling back or failing. Many more job losses on the horizon. Fewer people in the market for expensive real estate = lower prices. Simple supply and demand.

All in all, it's a poor time to be a real estate speculator. This unique Covid thing with all its ramifications has not been fully discovered yet. Markets have turned and we are now waiting to see where the bottom is. Good luck!
 
It's hard to speculate on anything because this is not an economic downturn its a health crisis.

The thing that i see hurting the vancouver market the most is foreign buyers and that my cause a big decline in prices.
 
wildmanyeah said:
It's hard to speculate on anything because this is not an economic downturn its a health crisis.

The thing that i see hurting the vancouver market the most is foreign buyers and that my cause a big decline in prices.
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I was driving through West Vancouver recently...the number of For Sale signs in the front lawns of huge homes is shocking! West Van typically has a lot of For Sale signs, but it seems like they're even more prevalent now.
 
Pineapple Express said:
I was driving through West Vancouver recently...the number of For Sale signs in the front lawns of huge homes is shocking! West Van typically has a lot of For Sale signs, but it seems like they're even more prevalent now.
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In particular, take a drive from the Properties, it is like a war zone up there with 1/2 finished mcmansions that will likely never be completed.
 
kaelc said:
Who did you go with, I'm thinking about remortgaging?
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PM coming your way. I have a great mortgage broker. That said I’m not so sure this rate is still available. He’s knocked my last two out of the park though.
 
kaelc said:
Who did you go with, I'm thinking about remortgaging?
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I'd give Simplii a call, I just signed for 2.49 fixed over 5 years. Over the last month its gone down from 3.1 to 2.79 down to 2.54 and now 2.49. My last mortgage was 1.95 my old variable rate that I locked in when rates started going up 4 years ago.
 
Dec 2017 I signed a 5 year 2.5%. I doubt I'd do better now and might just risk riding it out for another 2.5 years then flipping to variable for a while.
 
All you guys carrying mortgages or doing a refi now need to take full advantage of that sweet cheap cash and pay that effing thing down at every opportunity. Take a short amortization schedule and dump whatever you can, whenever you can, to get out from under that bank leverage, wherever possible.
 
ab1752 said:
All you guys carrying mortgages or doing a refi now need to take full advantage of that sweet cheap cash and pay that effing thing down at every opportunity. Take a short amortization schedule and dump whatever you can, whenever you can, to get out from under that bank leverage, wherever possible.
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sure you got 1.1m kicking around? o_O
 
I don't know any broker who would suggest a fixed rate right now for anyone, except for a very specific few. Do some math, run the options, graphs and variable wins in all but a dire rate increase scenario, doubt there will be any big increases after this mess. Banks are raising rates by taking away their sub prime %s. I just borrowed investment money at a lower rate than what has been posted on here. Each person is different with credit scores, leverage, assets and good vs bad debt, I would say shop around, there are no friendly brokers when 1000's of $$$$$ are at stake.

HM
 
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