Mortgage rates are going back up

[Sidney Crosby's Hat]

Originally Posted by Rerun

I see that as of today ATB still has their 5yr closed rate at 3.5%

Today is the absolute last day. Then it goes up to 3.9%.

[Jedi Ninja]

Originally Posted by Sidney Crosby's Hat

Today is the absolute last day. Then it goes up to 3.9%.

3.9 is still pretty good. I phoned into ATB at lunch today and locked in the 3.5. I was going to try to ride things out until next April (when my penalty will revert to 3 mos. interest) but now I smell inflation in the air. What would be really scary is '70s style stagflation and accompanying interest rates. Right now if I could get 25 years at 5% like they can in the US, I'd totally go for it.

[Micvanlen]

If you have equity in your home then you'll want to check out a Home Equity Line of Credit. It's not something the banks promote much because it's probably one of their lowest margin products. Here's how it works: you get up to 80% of the value of your home as a line of creadit at a rate of prime + 1. So, if your home is worth $300,000 and you have a mortgage of $200,000, then you can get a HLOC up to $240,000. Your next step is to pay off your mortgage with the HLOC. Why? becuse you get better rates, you get an extra $40K of credit to use as you whish and you can pay off as much of the credit as often as you like. That's right and it's why banks don't like it much. You can put a bigger dent into your princaple faster with complete freedome. Check it out.

[Wookie]

Bond yields down a bit the last few days. A few weeks like this a we could see rates going back down a bit.

[Russic]

Bloody hell this stresses me out for some reason. I've been living the sweet life with a variable for some time now ... but all this chatter is starting to freak me out.

[Slava]

Originally Posted by Russic

Bloody hell this stresses me out for some reason. I've been living the sweet life with a variable for some time now ... but all this chatter is starting to freak me out.

Just relax. Inflation is not a big deal at all at this point in time. Mark Carney from the Bank of Canada says that the short-term rates will not rise until this time next year. The move in the bond market looks a bit premature.

Not only that, but holding a variable over the longer term of canadian history has seen a pure advantage as opposed to locking in for 5 year terms.

[Bob]

Originally Posted by Jedi Ninja

3.9 is still pretty good. I phoned into ATB at lunch today and locked in the 3.5. I was going to try to ride things out until next April (when my penalty will revert to 3 mos. interest) but now I smell inflation in the air. What would be really scary is '70s style stagflation and accompanying interest rates. Right now if I could get 25 years at 5% like they can in the US, I'd totally go for it.

25 years @ 5% is stupidly good.

My dad has a book from the late 70s or early 80s that lists mortgages, payments, and other stuff in a massive table and it doesn't consider interest rates below 6%. At the time that book was printed I guess it was just nuts to think you could get something for lower than 6% interest. My parents are fond of reminding me that their first mortgage was at something like 12% interest.

[skins]

Originally Posted by Micvanlen

If you have equity in your home then you'll want to check out a Home Equity Line of Credit. It's not something the banks promote much because it's probably one of their lowest margin products. Here's how it works: you get up to 80% of the value of your home as a line of creadit at a rate of prime + 1. So, if your home is worth $300,000 and you have a mortgage of $200,000, then you can get a HLOC up to $240,000. Your next step is to pay off your mortgage with the HLOC. Why? becuse you get better rates, you get an extra $40K of credit to use as you whish and you can pay off as much of the credit as often as you like. That's right and it's why banks don't like it much. You can put a bigger dent into your princaple faster with complete freedome. Check it out.

Except the bank can change that to prime +2 or more whenever they want, while mortgage rates guaranteed. Also, don't most HELOC's require you pay off 2% of the balance every month? I know some you can make interests only payments.

Can you write off the interest payments on a HELOC if you can prove the money is invested in real estate?

[albertGQ]

Wow. That ATB rate did not last long at all. The 3.50% rate was supposed to be for the whole month. Then they changed their minds and were supposed to raise it to 3.70% shortly after, but that rate turned to 3.90%. Now the rate is 4.55%. Which is the same as my blended rate with a 5.60% interest rate. Man am I glad I had the heads up when I did.

[SeeGeeWhy]

Originally Posted by Slava

Just relax. Inflation is not a big deal at all at this point in time. Mark Carney from the Bank of Canada says that the short-term rates will not rise until this time next year. The move in the bond market looks a bit premature.

Not only that, but holding a variable over the longer term of canadian history has seen a pure advantage as opposed to locking in for 5 year terms.

I had a good paper on that in my possession a while back, but I can't seem to find it anymore. If I ever come across it again, I will put it up here for all to enjoy.

[macker]

[quote=Slava;1890349]Just relax. Inflation is not a big deal at all at this point in time. Mark Carney from the Bank of Canada says that the short-term rates will not rise until this time next year. The move in the bond market looks a bit premature.



It's difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed's actions because, frankly, we haven't ever seen anything like this in the U.S./Canada. To date what's happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. People need to realize that someone is going to have to pay for this mess. Just look around you....things aren't getting cheaper no matter what it is....gas, food, etc. etc. and I don't even want to get into how the inflation rates are determined as that is even more OT....Jim Rogers knows where things are going......http://financeprofessorblog.blogspot...-seems-to.html

[Wookie]

Well, bond prices seem to have come down about 10bps since the spike. Rates are the same, but the spread the banks are getting has increased to capture the 10bps difference.

Might mean rates will ease a bit over the summer.

[Foundations Man]

Originally Posted by skins

Except the bank can change that to prime +2 or more whenever they want, while mortgage rates guaranteed. Also, don't most HELOC's require you pay off 2% of the balance every month? I know some you can make interests only payments.

Can you write off the interest payments on a HELOC if you can prove the money is invested in real estate?

With a HELOC you are never required to pay 2% of the principle per month or ever for that matter. You just have to pay the interest. Thats the beauty of them!

PLEASE tell me none of you bought mortgage insurance from where you got the mortgages!
Check this out:
http://www.cbc.ca/marketplace/2008/0...ce_not_always/
Watch the video

[Wookie]

Originally Posted by Wookie

Well, bond prices seem to have come down about 10bps since the spike. Rates are the same, but the spread the banks are getting has increased to capture the 10bps difference.

Might mean rates will ease a bit over the summer.

Another 10 bps down, 5 year bond rate is at about 2.45, when I last posted they were 2.55 and the week before 2.65, and when rates spiked a bit it was 2.8. Hopefully we'll see some downward pressure.

2:00pm today.

Jul-2014 2.44
Aug-2014 2.46