Interest rate increases this year?

[WinnipegFan]

I am undecided as to what will happen. It makes sense to increase the rate but this could seriously challenge some people who are heavily in debt.

http://www.cbc.ca/m/news/topstories/...2015-1.2882895

[Canehdianman]

I think we will likely lag the US (if they start increasing interest rates in Spring), especially if oil prices remain low.

Otherwise, bring it on. A nice 20-30% drop in house prices would be the perfect time to jump up to a bigger house.

[FlamesAddiction]

As someone in the first year of a 25 year mortgage and isn't locked in, I am hoping that they don't go up, but even if they do, it is not going to break me (assuming the base rate is the 1.25% or 1.5% they are predicting). As it is right now, my mortgage and utility payments are actually close to what my rent and utility payments before I bought the home, so definitely no regrets.

Just out of curiosity though, are there options to change your mortgage to a fixed one after the first year (my year will be on the 23rd of this month), or do you have to wait until the 5 year term first?

On the bright side though, it makes buying a 2nd property easier if prices go down.

BTW, that original link wasn't working:

http://www.cbc.ca/news/business/get-...2015-1.2882895

[calgarygeologist]

Originally Posted by FlamesAddiction

Just out of curiosity though, are there options to change your mortgage to a fixed one after the first year (my year will be on the 23rd of this month), or do you have to wait until the 5 year term first?

On the bright side though, it makes buying a 2nd property easier if prices go down.

You should be able to convert your variable to a fixed rate mortgage at any time. I believe that most lenders allow this but you may not get a very attractive rate for your remaining term.

[FlamesAddiction]

Originally Posted by calgarygeologist

You should be able to convert your variable to a fixed rate mortgage at any time. I believe that most lenders allow this but you may not get a very attractive rate for your remaining term.

Thanks, maybe I will look into it.

I remember reading before that over the course of most mortgages, it almost always is better to be variable as long as you can weather the high interest rate years (going all the way back to 1935 or something like that). Having said that, the goal is to not actually make it a 25 year mortgage.

[corporatejay]

Originally Posted by calgarygeologist

You should be able to convert your variable to a fixed rate mortgage at any time. I believe that most lenders allow this but you may not get a very attractive rate for your remaining term.

It is usually at the posted rate (i.e. the rate on the door) and therefore 2% higher than what you can actually pay.

[Johnny199r]

I don't see interest rates rising. The Feds manufactured this ridiculous problem of everyone out there buying houses with inflated monopoly * edited* money. They're not going to turn around and bankrupt those same people, as much as I would like them to.

[FlamesAddiction]

What's monologue money? I have never heard that term before.

[CaptainYooh]

Originally Posted by Johnny199r

...They're not going to turn around and bankrupt those same people, as much as I would like them to.

Why would you want to bankrupt these people this much?

[Antithesis]

I like to think of myself as financially responsible, and our family could absorb a significant rise in interest rates before becoming uncomfortable. I disagree with people making the decision to buy a house expensive enough that a small (or any) rise in rates would cause them problems, but I would certainly not wish ill on others who made such a decision no matter how irresponsible I think it may be. Hoping for the financial ruin of others is really disgusting, whether you agree with their decisions or not.

[4X4]

Originally Posted by Johnny199r

I don't see interest rates rising. The Feds manufactured this ridiculous problem of everyone out there buying houses with inflated monopoly * edited* money. They're not going to turn around and bankrupt those same people, as much as I would like them to.

Lol. Ok. I hope you fall down the stairs tomorrow morning?

[Red]

Originally Posted by Johnny199r

I don't see interest rates rising. The Feds manufactured this ridiculous problem of everyone out there buying houses with inflated monopoly * edited* money. They're not going to turn around and bankrupt those same people, as much as I would like them to.

But there is another side to that coin, retirees and the ones close to retirement. They have been getting the shaft for a long time now with their pensions getting such low returns. And these guys have little time left to recover from this. Young with debts have a whole life to make up for it.

[4X4]

Originally Posted by Red

But there is another side to that coin, retirees and the ones close to retirement. They have been getting the shaft for a long time now with their pensions getting such low returns. And these guys have little time left to recover from this. Young with debts have a whole life to make up for it.

So? Johnny99 wants to buy a house, but can't afford to pay market value. Can't you see that it'd be much better for a large percentage of the population to lose their houses, so that he can pick up a bargain?

Think before you speak, Red.

[Johnny199r]

What I despise is people taking on these really big mortgages leaving them absolutely no wiggle room in case of an emergency, ie job loss, but more importantly, in the event interest rate eventually rise, which they eventually will and then the inevitable begging of govt intervention, when it was completely their own fault.

[Antithesis]

No matter how much you try to polish up that turd of a post, it's still a disgusting sentiment.

[Johnny199r]

Originally Posted by 4X4

So? Johnny99 wants to buy a house, but can't afford to pay market value. Can't you see that it'd be much better for a large percentage of the population to lose their houses, so that he can pick up a bargain?

Think before you speak, Red.

You do realize that high interest rates would be excellent for retirees right? Higher Bond returns, more fully funded pensions?

[Slava]

Originally Posted by Johnny199r

You do realize that high interest rates would be excellent for retirees right? Higher Bond returns, more fully funded pensions?

OK so say you bought bonds when the rates were low (say for the past five years). How does that rising interest rate help you?

[4X4]

Originally Posted by Johnny199r

What I despise is people taking on these really big mortgages leaving them absolutely no wiggle room in case of an emergency, ie job loss, but more importantly, in the event interest rate eventually rise, which they eventually will and then the inevitable begging of govt intervention, when it was completely their own fault.

You're hilarious. So in the last post, you blamed the government for creating this "mess", and then you wish the government would come along and bankrupt all the people that they enabled, and now it's those peoples' fault for buying during good times, and you despise these people, because you can't afford to buy your own house?

Dude, how about you and ExiledFlamesFan run off together and just...run off...together.

[Johnny199r]

Originally Posted by 4X4

You're hilarious. So in the last post, you blamed the government for creating this "mess", and then you wish the government would come along and bankrupt all the people that they enabled, and now it's those peoples' fault for buying during good times, and you despise these people, because you can't afford to buy your own house?

Dude, how about you and ExiledFlamesFan run off together and just...run off...together.

Just because there's low rates, doesn't mean people should lose the ability to think rationally and use their brain about long term consequences.

[4X4]

Originally Posted by Johnny199r

Just because there's low rates, doesn't mean people should lose the ability to think rationally and use their brain about long term consequences.

Well you don't seem to be able to use yours to figure out how to buy a house. Your strategy is to hope that the government bankrupts people that already bought, so that you can pick up a foreclosure? Thanks for your contribution here.