Will the new Interest increase affect you?

grizzly

Orgasm Donor
Feb 24, 2010
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The hike on mortgage rates isn't my main concern, as .25% isn't going to put many people in the poor house. My concern is the bank of canada rate change also reflects on the national debt. Not only are your mortgage rates increasing, but your property taxes will also increase to service the added cost of our government borrowing money. They're also talking about another increase in 6 months.
 

Equity Market investor

New West ( energy sector)
Apr 9, 2009
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Personally, my mortgage is manageable. I think if rates were to go up 1 full base point and beyond ( which I don't think it will ) then, many could be up shit creek with no paddle. And I mean MANY!! Especially here in Vancouver, where the cost of living is at nose bleed level and many are living pay cheque by pay cheque. It's seriously crazy in Vancouver.

.25 bases pts won't do much damage imo. Hence that, I have slowly stepped in and began to buy life insurance & banks stocks :thumb:
 
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giaebonyprincess

Active member
Jan 1, 2017
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Calgary
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I think it would be wise for people to put down as much as they can on the principle each year before your term ends, since the current interest rate is so low now. Most people are allowed about 16% of their mortgage each year depending on your contract?

It could be hard for some if you have a family or just life period.
 

westwoody

Well-known member
Jun 10, 2004
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It could be hard for some if you have a family or just life period.
But it will help a lot of us old geezers who benefit from investment income.
My mortgage was paid off back in the last millenium so no worries there.

The low interest rates helped create the current housing bubble. Easy money allows buyers to borrow more and pay more, so sellers will raise prices.

It will be interesting if prices slump and people are stuck in mortgages greater than the value of their house. I have friends in the USA who are in this predicament.
 

MRGREEN

Lost in Translation
Jul 7, 2003
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Winnipeg
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From a personal basis, no as I hold no debt. As a consumer and taxpayer there could be impacts with institutions and Govt debt servicing costs.

But it's a first world problem and a bit of a wake up call might not be a bad thing.

MG
 

westwoody

Well-known member
Jun 10, 2004
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anyone here remember the 80s? 20% plus. this is nothing!!
I remember at least three friends in Airdrie handing over their keys to the bank and walking away.
Very tough times for a lot of people.
 
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westwoody

Well-known member
Jun 10, 2004
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what did you guys do to pay off your mortgage faster?
Prepay every cent you can!
Especially right at the beginning when you are paying 95% interest and 5% principal.
Biweekly payments. NOT monthly.
I had a big amortisation graph printed and tried to stay ahead all the time.
 

steiln

Member
Feb 11, 2010
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I remember at least three friends in Airdrie handing over their keys to the bank and walking away.
Very tough times for a lit of people.
were good times if you had money tho. had a friend who bought 25 houses in Calgary for a dollar down, rented them out for 25 years and is sitting pretty nice now
 

Equity Market investor

New West ( energy sector)
Apr 9, 2009
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Everyone's input so far is really informative, but it would be nice to here from people who are actually paying a mortgage or for the seniors (just kidding) what did you guys do to pay off your mortgage faster?
I'm still paying a mortgage, but its manageable as I stated earlier. I budget myself. What I make from work, then, less expenses. For expenses, I'm including a bit of entertainment as well. Not just " fixed " . Whatever I have left over, if any, I make addition payments. So yes, I try and put extra $$ towards my mortgage. The more extra money placed down, you will end up paying it off a lot quicker. Now that rates are still low....no better time than now.

For me personally, I will be honest, since purchasing my higher end Condo, I haven't participated as much in this hobby compared to when I rented. Not even close. Home ownership is definitely costly in this city T.B.H
 
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LalaniElectrica

Active member
Oct 1, 2010
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Nanaimo
This situation was mentioned to me years ago upon purchasing my first home.. That is the reason I choose a very low key, low overhead house with the proper zoning for a small business. It suits my needs and was not too expensive, therefore I could pay it off in a really short amount of time, so if there was a increase in interest and/or property taxes, it would be very easy to manage through it, and still keep the equity I put into it...I guess it was a good investment after all!
 

giaebonyprincess

Active member
Jan 1, 2017
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Calgary
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This situation was mentioned to me years ago upon purchasing my first home.. That is the reason I choose a very low key, low overhead house with the proper zoning for a small business. It suits my needs and was not too expensive, therefore I could pay it off in a really short amount of time, so if there was a increase in interest and/or property taxes, it would be very easy to manage through it, and still keep the equity I put into it...I guess it was a good investment after all!
very smart, I did the same.

All of you get a A plus

chocolate kisses for everyone!!!
 

deathreborn

Active member
Jan 17, 2011
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the canadian dollar has risen bigtime in the last couple weeks because of this. so i am benefiting as i'm saving money on my regular purchases from the US. today at the currency exchange they were selling at 1.277. rates haven't been that low in over a year.
 

grizzly

Orgasm Donor
Feb 24, 2010
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I realize most people dream of being mortgage free, but in my mind it makes more sense to extend your 2.75% mortgage for as long as you can., keep those credit cards and lines of credit paid off, and invest your disposable income. Most mutual funds are performing around 5 to 8 percent right now, which puts you earning at least 2.25% over the cost of borrowing for your mortgage. Once you accumulate a substantial portfolio and achieve a comfort level, expand into self directed investments such as buying stocks.

Even back in the early 90's when I purchased my first home at 16% I believe it was, I followed this philosophy as mutual funds were returning over 20%. Even when I purchased another home, I put down the minimum from the equity in my old home, signed up for another 25 year mortgage to keep my mortgage cost down and my disposable income up and invested the rest of the equity. It was just a matter of time before my dividend checks were in effect paying my mortgage.

With compound interest, the earlier you start investing, the richer you will be.
 
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