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Old 09-08-2010, 09:01 AM   #1281
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So if the BOC raises the prime lending rate is it fair to expect that the x in Prime-x% should go up on variable mortgages?
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Old 09-08-2010, 09:07 AM   #1282
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^ If the BOC raises its rate, the banks will raise the prime rate very shortly thereafter, so your variable rate mortgage rate would go up the same amount.
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Old 09-08-2010, 09:09 AM   #1283
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So if the BOC raises the prime lending rate is it fair to expect that the x in Prime-x% should go up on variable mortgages?
Sorry, misread your post. Obviously the prime will go up, making an existing variable rate mortgage more expensive. The last time prime went up, the banks increased the 'x' so the actual rates available didn't change that much. Hopefully that's what happens again, at least for those looking to buy/refinance soon. It depends on their funding costs and the competition for loans.
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Old 09-08-2010, 07:16 PM   #1284
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^I don't know chemgear. I just kind of accepted the 4-11 times figure that was posted in the first place as being accurate and don't know what it's based on really.
Heh, fair enough. If it is household income then I would suggest that the dual/single income difference doesn't really affect the ratio. It's just the total dollar value (which may/has gone up over time based on the scenario described earlier.)

And I guess the Bank of Canada decided to jack up rates another 0.25% today - still at stupidly low emergency levels though. Lots of waffling about what happens from here though, nothing sounds definite at this stage.

Last edited by chemgear; 09-08-2010 at 07:20 PM.
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Old 09-08-2010, 08:04 PM   #1285
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I just kind of accepted the 4-11 times figure that was posted in the first place as being accurate and don't know what it's based on really.
According to the article:
Quote:
"Based on the median after-tax income of total under 65 economic families."
After tax, and calculated based on all 6 cities. I would imagine Calgary itself sits higher than most of those other cities in median income. Not sure what qualifies as an "economic family".
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Old 09-08-2010, 08:25 PM   #1286
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Originally Posted by Winsor_Pilates View Post
According to the article:

After tax, and calculated based on all 6 cities. I would imagine Calgary itself sits higher than most of those other cities in median income. Not sure what qualifies as an "economic family".
The median household income for Calgary in 2006 was about 82,000 according to the 2006 census.


http://www.cbc.ca/canada/calgary/sto...-earnings.html
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Old 09-09-2010, 01:17 PM   #1287
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Is this new or has it still been around this whole time?

http://www.cibc.com/ca/mortgages/art...t-csh-bck.html

No downpayment?
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Old 09-09-2010, 01:21 PM   #1288
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Where does it say no down payment? "Cash back" implies cash given to begin with. EDIT: Oh I see the cash back is based on the mortgage value.. ok, but still doesn't say no down payment.
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Old 09-09-2010, 01:30 PM   #1289
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I guess I'm working from the get a hold of 5% for a few days/weeks (borrow?) and get as much as 7% back - and then blow the "free" 2% case on a vacation!

I'm sure there is a little bit of fine print but am I missing something here? I didn't think we still had these kicking around.

Oh and I came across these really neat plots/numbers:





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Old 09-09-2010, 03:03 PM   #1290
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Originally Posted by chemgear View Post
Is this new or has it still been around this whole time?

http://www.cibc.com/ca/mortgages/art...t-csh-bck.html

No downpayment?
There are a few lenders that offer a "cash back" product which essentially acts as a down payment for the client.

The lender forwards the "cash back" the the lawyers office at time of closing for the down payment. The client then pays a higher interest rate for the term of the mortgage.

These cash back mortgages are tougher to qualify for. You have to have a sparkling application for them to approve you, but essentially no down payment mortgages are still available.
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Old 09-09-2010, 03:23 PM   #1291
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Originally Posted by Mike Oxlong View Post
There are a few lenders that offer a "cash back" product which essentially acts as a down payment for the client.

The lender forwards the "cash back" the the lawyers office at time of closing for the down payment. The client then pays a higher interest rate for the term of the mortgage.

These cash back mortgages are tougher to qualify for. You have to have a sparkling application for them to approve you, but essentially no down payment mortgages are still available.
Hmmm they don't indicate actual interest rates on that site - I wonder what the incremental interest rate premium would be?
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Old 09-09-2010, 05:44 PM   #1292
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I hope those are really hard to qualify for. I was quite happy with the regulations added in April and don't want to see easy ways for under-qualified people to get over mortgaged.

Good for me in the short term, not worth it in the long.
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Old 09-09-2010, 10:24 PM   #1293
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Originally Posted by Mike Oxlong View Post
There are a few lenders that offer a "cash back" product which essentially acts as a down payment for the client.

The lender forwards the "cash back" the the lawyers office at time of closing for the down payment. The client then pays a higher interest rate for the term of the mortgage.

These cash back mortgages are tougher to qualify for. You have to have a sparkling application for them to approve you, but essentially no down payment mortgages are still available.
Alternatively, some lenders will lend you the 5% down outright as a 5 year term loan, and then give you a mortgage at the going rate for the rest. If you can service the debt it's likely a better route then paying posted rates on the mortgage for the cashback option.
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Old 09-10-2010, 02:14 PM   #1294
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Originally Posted by chemgear View Post
Hmmm they don't indicate actual interest rates on that site - I wonder what the incremental interest rate premium would be?
I just looked into Scotia's cash back program and basically for a 5 year term you pay the posted rate which is currently at 5.39%

Opposed to their best 5 year term which is about 3.89% right now. I'd have to look into it but I imagine CIBC and the others are quite similar.

So you are basically paying 1.5% more for them to come up with the down payment for you. 5.39% is actually a good rate if you look long term. It just seems sky high right now because we've been spoiled with super low rates lately.
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Old 09-10-2010, 03:32 PM   #1295
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cibc has a promotion of 3.99 5 year with cashback I believe
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Old 09-10-2010, 08:23 PM   #1296
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I saw a "just 1% down for a new house, ask us how" sign at ATB today.

Banks trying to drum up business/more market share perhaps?
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Old 09-11-2010, 09:05 PM   #1297
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I agree, but from everything pepper24 has posted it doesn't sound like he does. That's why I asked.

Of everyone posting in this thread, he seems to be the only one acting 100% confident and absolute with his predictions.
So while I respect a lot of the logic and reasoning beyond money you've presented, I'm still waiting on the answer from the person I asked in the first place.
Sorry for the slow reply as I was away on business last week.

The idea makes sense but at the end of the day we like the neighborhood, the size of our lot and the closeness the downtown. Work, Dome, TD Center, shopping, restaurants, bars, parks etc. are all 20 minutes tops by foot. We are not interested in the suburbs and it's a great area for our young family. I bought in 2003 when I was single, working out of the country and downtown living hadn't fully caught on. It's had a great run in value but the priority is lifestyle. The current house isn't anything special (the value is mostly lot size and proximity to downtown) so eventually we want to tear it down and build a new home. I have the blue prints ready but will probably hang tight for a few more years. It's on a 67' lot so I am not willing to gamble on finding a similar lot at a later date along with the hassles of renting etc.
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Old 09-13-2010, 02:22 PM   #1298
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More to the above graphs about debt loads:

http://www.financialpost.com/news/Dr...869/story.html

It’s little wonder, considering that almost six out of every 10 Canadians say they would be in financial difficulty if their paycheque was delayed, even by one week, according to a report Monday from the Canadian Payroll Association.

. . .


Perhaps most telling is the 81% response rate in the payroll survey to the question, what would you do if you won $1-million in the lottery. The answer: “Pay down debt.”


I wonder if "Hookers and Blow" was the other choice on the survey. If so, how the heck did debt win out?!


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Old 09-13-2010, 02:26 PM   #1299
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More to the above graphs about debt loads:

http://www.financialpost.com/news/Dr...869/story.html

It’s little wonder, considering that almost six out of every 10 Canadians say they would be in financial difficulty if their paycheque was delayed, even by one week, according to a report Monday from the Canadian Payroll Association.

. . .



Perhaps most telling is the 81% response rate in the payroll survey to the question, what would you do if you won $1-million in the lottery. The answer: “Pay down debt.”




I wonder if "Hookers and Blow" was the other choice on the survey. If so, how the heck did debt win out?!




I'm not disagreeing that Canadians are in debt (and many are in too much debt). I just wonder if the "most telling" question is about what people would do if they won the lottery though. To me that just shows that people are prudent. It doesn't mean that they would spend all of the $1 Million paying off debt. In other words if the question is "What would you do with $100 million?" the answer of "pay debt" would still be there.

It doesn't mean that people have $100 Million in debts though, its just that paying debts is a high priority for people, and there is no harm in that mindset.
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Old 09-13-2010, 04:45 PM   #1300
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I'm not disagreeing that Canadians are in debt (and many are in too much debt). I just wonder if the "most telling" question is about what people would do if they won the lottery though. To me that just shows that people want to be prudent. It doesn't mean that they would spend all of the $1 Million paying off debt. In other words if the question is "What would you do with $100 million?" the answer of "pay debt" would still be there.

It doesn't mean that people have $100 Million in debts though, its just that paying debts is a high priority for people, and there is no harm in that mindset.
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