wildmanyeah
Crew Member
maple ridge
Mortgage rates on the rise as lending rates are cut
- Thread starter Unreel
- Start date
maple ridge
wildmanyeah
Crew Member
Me and my wife were following the market in June and July and we watched as a number of houses were getting reduced in price. In fact the first houses we went in looked at in the first week of July had there prices reduced a few times.
Everything change after we had sold like like switch that same week. I should of known something was up when we sold our house in a few days for asking but we had kinda a rare town house, end unit, raised back yard and big.
by the third week of July me and my wife we
Going but and actually kinda hoping our sale would fall though as the market was going insane and it looked like we were gonna be priced out of the market for what we wanted.
Everything change after we had sold like like switch that same week. I should of known something was up when we sold our house in a few days for asking but we had kinda a rare town house, end unit, raised back yard and big.
by the third week of July me and my wife we
Going but and actually kinda hoping our sale would fall though as the market was going insane and it looked like we were gonna be priced out of the market for what we wanted.
Unreel
Well-Known Member
Not mortgages but lending related. Looks like any help from TD bank is now over, they are now increasing their interest rates by almost double for lending products like line of credits and loans. Got a notice that my loc is going from 4-8% and I have perfect history and never even requested any "covid relief" assistance from them. Called the number on the notice and told them I would be moving any balances to Scotia and closing all my Td accounts. Customer service guy said they've had quite a few unhappy clients calling about the increase. Disgusting but somehow not surprised at all from TD.
Rockin Rob
Member
I got a 1.75 % 5 year closed at scotia last week.
Didn't even have to whine ,simply asked the nice person on the other end of the phone
Didn't even have to whine ,simply asked the nice person on the other end of the phone
Aces
Well-Known Member
That sucks
ILHG
Crew Member
They tried the same thing with me. I came home after work, opened up a letter that told me my rate on a unsecured LOC was going up 3.25%.... It made my blood boil. I have perfect credit and have been a customer since I was 18. Never asked for any COVID **** either. I told the customer service rep they had 48hrs to reverse it or I would be closing all my accounts.
Less than 48hrs later I got a call back being told nothing would change.
Now I'm pissed though. Who the hell do they think they are. Interstate rates are at an all time low. The country is going through a massive depression & we are in the middle of a pandemic. I will be looking at switching my accounts
tubber
Well-Known Member
Thanks for the heads up. My RBC LOC has no balance, but I'll keep an eye on it now. Checked and 5.2% seems pretty high. I can't imagine using it at that rate.
My kid finally bought a condo in Vancouver. They bid over asking after being outbid quite a few times since the spring. I can't pretend to understand that market.
My kid finally bought a condo in Vancouver. They bid over asking after being outbid quite a few times since the spring. I can't pretend to understand that market.
Morty
Well-Known Member
Above of some of the reasons I recommend that people not get a Line of Credit. They're actually only Lines of CREDIT until you actually use them, then they are instantly Lines of DEBT. The banks purposely misnamed them because Line of Credit sounds great, but who would want a Line of Debt ??
One of the reasons they're increasing the rate is that they're trying to encourage people to pay them down/off. Lines of credit cause banks to have a lot of credit "exposure". If they approve you for $100,000 LOC but you only use $20,000, the bank still has to keep reserves to back up the $80,000 that not earning interest for them. Multiply that by thousands of customers and the bank has hundreds of millions of dollars they can't lend out to actually earn interest. (gotta look after the shareholders)
Not only can they change the rate at any time on short notice, they can also call for full repayment if THEY feel you're not managing your credit well enough.
My rule is that credit line limits should only be for an amount that can be paid off, in full, in a year or less. Otherwise - get a regular mortgage. (a mortgage is simply security for a loan) With Fixed mortgage rates being in the 2% range, borrowers are far better off borrowing what they think they'll need as a regular mortgage. If someone has extra money from the mortgage, it can easily be invested somewhere else an earn more than the 2% cost, and even put in an RRSP that also generates an income tax refund.
One of the reasons they're increasing the rate is that they're trying to encourage people to pay them down/off. Lines of credit cause banks to have a lot of credit "exposure". If they approve you for $100,000 LOC but you only use $20,000, the bank still has to keep reserves to back up the $80,000 that not earning interest for them. Multiply that by thousands of customers and the bank has hundreds of millions of dollars they can't lend out to actually earn interest. (gotta look after the shareholders)
Not only can they change the rate at any time on short notice, they can also call for full repayment if THEY feel you're not managing your credit well enough.
My rule is that credit line limits should only be for an amount that can be paid off, in full, in a year or less. Otherwise - get a regular mortgage. (a mortgage is simply security for a loan) With Fixed mortgage rates being in the 2% range, borrowers are far better off borrowing what they think they'll need as a regular mortgage. If someone has extra money from the mortgage, it can easily be invested somewhere else an earn more than the 2% cost, and even put in an RRSP that also generates an income tax refund.
RiverBoy
Well-Known Member
except for when your main blows up right in the middle of salmon season and you need it fixed NOW!
Gong Show
Well-Known Member
I have been seeing some lenders 'giving' our client a HELOC, mortgage with a LOC.
The LOC had a zero balance, but the lender was charging monthly LOC account fee of $16.00!!!
I asked the client if this was the first time they knew they were paying such a monthly fee for credit they were not using, and every time they responded affirmatively.
This was a chartered bank, who I cannot disclose to my professional obligations, but please get a trusted independent advisor to look over the terms on some of these blended/'extras' products.
The LOC had a zero balance, but the lender was charging monthly LOC account fee of $16.00!!!
I asked the client if this was the first time they knew they were paying such a monthly fee for credit they were not using, and every time they responded affirmatively.
This was a chartered bank, who I cannot disclose to my professional obligations, but please get a trusted independent advisor to look over the terms on some of these blended/'extras' products.
Rain City
Crew Member
RBC charges me $15 a month to "maintain" my business LOC which gets next to no use. It's there in case I get lazy and don't bill for a couple months. Seems crazy for a personal one though.
UkeeDreamin
Well-Known Member
This is why I own Canadian bank stocks and why they pay such high dividend yields!
Cheers!
Ukee
Cheers!
Ukee
wildmanyeah
Crew Member
arnt oligopolies fantastic
UkeeDreamin
Well-Known Member
Yup, if you can’t beat em, May as well try and make some $$$ off them (they’ve certainly made enough money off of me)!
Cheers!
Ukee
Cheers!
Ukee