Canada, mortgage, rates

Playing it safe with a locked in decade

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Interest rates are at historical lows and it doesn’t look like that’s due to change anytime soon.

Of course if you could predict future changes with accuracy you could become incredibly wealthy.

It’s the unknown that’s the challenge and that’s why some people chose to pay a premium to lock in todays low rates for many years.

Unfortunately you can’t get the incredibly low rates that US buyers enjoy on a 25 year term, but 10 year rates have fallen along with 5 year and variable rates.

Ten year products are growing in popularity recently with terms available as low as 3.6% according to this article in the Financial Post.

only about 1% of the market locks in for longer than 10 years, Bank of Montreal recently did away with an 18 year locked in mortgage:

“We had to shelve that. It wasn’t a very accepted product by customers,” said John Turner, director of mortgages at Bank of Montreal. “People have a problem getting their head around that long of a commitment.”

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rp1
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Let it be noted that today, the mainstream media felt it should introduce you to a 25 year mortgage at 8.75% with house prices near an all time high.

I don’t think you could go bankrupt faster throwing $500 chips around in a casino.

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5 years 11 months ago
RaggedyRenter
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Caught this interesting article:

http://www.scmp.com/news/china/article/1213977/how-mainland-chinese-immigrants-are-transforming-vancouver

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5 years 11 months ago
auric goldfinger
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auric goldfinger
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We live in interesting times.
Has gold lost its shine,
http://www.theglobeandmail.com/globe-investor/inside-the-market/all-shine-and-no-substance-the-reality-of-gold/article11169399/

or is it war between West and East where price of GOLD AND SILVER
is the battlefield.
http://www.aljazeera.com/indepth/features/2011/09/201199175046520396.html

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5 years 11 months ago
klein
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http://thetyee.ca/News/2013/03/28/Patrick-Kinsella-Arizona/

BC Liberal oligarch rats are leaving the ship.

“After more than a year-and-half on the market, Patrick Kinsella’s Shaughnessy mansion has finally sold.”

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5 years 11 months ago
RFM
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The dominos start to fall: SFR Project on indefinite hold in Van West! This is a property I have been watching for some time: 4988 Chancellor Boulevard in University, Vancouver West. A 7,700 square foot lot with an old house in an exclusive area of mostly older homes, with a few new builds. Sold under MLS V951758 in June 2012 for about $2,600,000 (listing was at $2,688,000); by June 2012, properties in Van West were already coming under some price pressure. After it was sold, a sign appeared on the site, advertising a new 4,500 square foot modern architectural home to be ‘built in 2013′ with completion by 2014, priced at $5,188,000 under V989612 (still active, but listing now says ‘completion in 18-24 months’). However, after about 6 weeks the sign disappeared and from June 2012 through last week the… Read more »
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5 years 11 months ago
house of gold
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The psychology of bull traps are entertaining to say the least. “It’s 10% off after a 300% run up. What a great deal! Must be time to buy.”
http://vreaa.files.wordpress.com/2012/01/k8947.png
We’ve all fell for it at times 🙁

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5 years 11 months ago
Makaya
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Two more bubbles popping today: Gold and Silver. I hope you’re all long pop-corn and booze…

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5 years 11 months ago
Bo Xilai
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http://www.vancouversun.com/opinion/columnists/Cayo+Loophole+helps+money+property+buyers+duck/8241427/story.html

Another example about how the small guys in BC get the shaft while the BC Liberals’ corporate friends get the gold mine…

Land Transfer taxes aren’t for rich people, just us little guys…

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5 years 11 months ago
Democrass
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According to Garth:

“And Scotiabank capped off the week with a sour note for homeowners, saying: “we expect increased downward pressure on prices in the latter half of the year and into 2014.””

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5 years 11 months ago
Billy Bob
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People have a problem getting their head around that long of a commitment AT SUCH AN OUTRAGEOUS RATE.” I salivate at the ability to lock in for (as much as) 30 years at a 3.6 range rate like in the US!

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5 years 11 months ago
jesse
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Paying low rates will help compensate for the, shall we say, lower capital appreciation.

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5 years 11 months ago
Short'em High
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Just in. http://www.bcrea.bc.ca/news-and-publications/news-room/news-releases/2013-03-statistical-release

March posted the largest seasonally adjusted month-to-month increase since January 2011,” said Cameron Muir… pent-up demand may be beginning to grow in the housing market.

Seasonally adjusted by which years and by what method of seasonal adjustment? Muir never tells us that. Instead Muir, aka Captain Dubious, cherry picks a sales change number that is high compared to an undisclosed averaging method and concludes pent-up demand is growing. Hey Muir, normalize that number one more time by inventory and see if it looks high dumbass!

Based on REBGV monthly sales rate per day, the only years on record with lower sales per day in this part of the “season” were 1999 and 2000. 13 years ago!

http://postimg.org/image/cmpsy4zav/

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5 years 11 months ago
Not much of a name...
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Not much of a name...
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@Short’em

Yup, what’s the saying about figures and liars???

YOY sales were down 17.7% and sales dollar volume was down 18.5%. Ouch! No seasonal adjustments necessary.

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5 years 11 months ago
Devore
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“Caught this interesting article:”

My BS meter spiked at this quote:

In Vancouver, we have come to a consensus that a global cosmopolitan society is what we are going to be.

Wow, becoming a resort town for Chinese is now a “global cosmopolitan society”. New York, watch out! Hiebert should know better, and probably does, but he’s talking his own book here.

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5 years 11 months ago
mac
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How is it the South China Post is able to post the facts on the “rapid transformation of Vancouver” and no bears comment on it? The Post must be racist! Look at how the two emigrants they profile “typify a vast wave of immigration that is rapidly transforming Vancouver.” That these two emigrants from China prefer Canada over Europe because Europeans insist on preserving their culture whereas in Canada they don’t. Noting Richmond is the first majority Chinese city outside China and Vancouver’s transformation is happening rapidly. Hmmm… there is even data backing up the argument: “Canada does not keep records on foreign ownership, but a Landcor Data analysis of all 164 homes sold for more than C$3 million (HK$23 million) in Vancouver’s core Westside neighbourhood in 2010 showed that 74 per cent were sold to buyers whose names were… Read more »
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5 years 11 months ago
Anonymous
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Global cosmopolitan society? Created by Chinese mainlanders? Give me a f*cking break….that is a place that only Chinese people will want to visit. What’s so Global or Cosmopolitan about that? Sounds ghetto to me….

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5 years 11 months ago
Q
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My jaw dropped too when I saw the word “consensus” in that article. I don’t remember being asked for my approval on selling out my city to the Chinese and when I tried to respectively raise objections to the transformation I was told to shut up and stop being racist.

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5 years 11 months ago
Anonymous
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i’ve even heard some people suggesting a new ‘head tax’, which i think is horrible. but now i think i understand what my ancestors went through when they put it in.

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5 years 11 months ago
vangrl
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gotta love this breaking news headline on BNN:

“jp morgon is cutting Barrick gold from overweight to neutral”

all amongst their constant reassurance that “the Canadian Real Estate market is in a balanced market”

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5 years 11 months ago
addair
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Crash fear is contageous.

As if the gold plunge wasn’t enough, China has downgraded it’s economic forecast, and the FED is now talking seriously about the end of easing. That is bound to bring the DOW down which had been driven up way too high anyway. All this in time for the “sell in May and go away” schtick.

All of this is negative for Vancouver housing.
Now that March (as it usually does) has sucked in a few more fools, I think this crash fear can jumpstart the down trend in housing. There is just no way for 2 years of declining sales not to have consequences.

All the ducks are now in the row.

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5 years 11 months ago
kabloona
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Somebody who probably should have listened to Dr Bernanke instead of investing in shiny rocks:

“The Gold Collapse Is Personally Costing Ron Paul A Fortune”

http://www.businessinsider.com/ron-paul-investment-gold-2013-4

Audit the Fed…? How about getting a better Investment Advisor instead…?

😀

😉

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5 years 11 months ago
YLTNboomerang
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Less than 1% lock-in for periods longer than 5 years not because they think rates will stay low but because the mentality here is the standard BS of “climbing the property ladder” whereby folks don’t expect to be living in the same place 5 years; not to mention flippers who don’t expect 2 years hence perference for variables.

I’m sure if you did a breakdown by province or city you would find BC/Vancouver as the lowest proportion of long term fixed and highest variable.

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5 years 11 months ago
kabloona
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BTW, anybody interested in some Coquitlam condos…?

😉

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5 years 11 months ago
Anonymous
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That these two emigrants from China prefer Canada over Europe because Europeans insist on preserving their culture whereas in Canada they don’t. Noting Richmond is the first majority Chinese city outside China and Vancouver’s transformation is happening rapidly. At the risk of not being PC, what we’re experiencing in Vancouver is nothing less than ethnic cleansing. Peaceful, non-violent, and slow moving, but ethnic cleansing nonetheless, where money have replaced the machetes/guns as a means for achieving this process. People are forced out of their home town not out of fear, not because of war, but for economic reasons. But the end result is the same. I know it’s hard to accept that fact, and my words are willingly provocative, but if you think about it in “prospective” terms, this is really what’s happening. What was the ethnic distribution of the… Read more »
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5 years 11 months ago
Lifetime Renter
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In reply to 18 Anon. There is no comparison between the racist head tax on Chinese and the present situation. The head tax was aimed at Chinese who, like those of European background, only wished to come here to work and build a better life. Given the extraordinary contribution Chinese workers made in helping to build the railroads and other infrastucture in this province, they more than deserved an equal opportunity. Instead, once they were no longer needed for the most dangerous jobs, many injured and killed in the process, the door was shut on them. The Chinese from the mainland described in the South China Post are those who have their snouts in the overflowing trough of superprofits that come from the superexploitation of hundreds of millions of their fellow citizens. Migrant workers in China have even fewer rights… Read more »
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