Quote:
Originally Posted by Fuzz
So how high do you think they will go? 10%? 20%? I just don't see it happening. 5-7%? Sure, that's possible.
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Well from what I was reading the US threshold for 'panic' and people running into refinancing problems is when the 30 year hits 5.75%
Canadian were able to get 2% fixed or even lower variable mortgages for the past 5 years. On a $500K mortgage that is monthly payments of $2100
At 5% renewal that goes up to $2900
At 7% $3500
At 10% $4500
The problem is the exponential increase in monthly costs/amount needed to furnish the interest
How high do I think it will go? I have no clue. No one does. I predict the next 18 months will be one of the most interesting (and terrifying) economic periods in Canadian history.
Hopefully inflation slows with the planned BoC rate rises over the next year and bond rates slow for fixed mortgages don't hyper inflate in rates and we see variable and fixed Mortgage rates stabilize between 4-5.5%
However, if inflation doesnt yield to rate increases...Look out
It is actually easier in some ways to stimulate the economy then slow down the economy. Especially one where the country is addicted to debt, as Canada is