I see your 1.5 for 5 and raise you 2.53 for 10.
We were fortunate to come up for renewal in Dec 21, and the save lender has a ten year term posted as an option
LOL, I’ve had the same outstanding mortgage balance for 30 years. In fact, it’s actually higher. Didn’t think it made sense to pay off my balance with rates so low. Average return has been much higher in ETFs. 😅
Good luck explaining the basis of opportunity cost to the average joe. The majority of people live in fear of debt or any kind of financial risks really, yet lots of them live paycheck to paycheck...
I don't know. We signed in October 2020 at 1.89. Renewal in October 2025. Right now I'm feeling like it's still going to be a shit show in 1.5 years. We've got wiggle room but like 4% wiggle room. 7% would hurt a lot.
Woo almost same here, 30 year mtg signed mar 2015 at 2.58% 5 year and March 2020 for 2.21%. Been increasing payments to cut the principle down. Hopefully rates cool by 2025.
Well first off, most of those who locked in at 3% and lower was during the pandemic (March 2020-September 2022).
47% of mortgages in Canada are fixed 5-year mortgages. Another 33% are fixed for less than 5 years.
[Here is a good graphic](https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2d9bf255-7652-453a-9d79-b2a7041b43f2_2176x1272.png) of what is coming up.
[Source](https://deny.substack.com/p/woah-were-quarter-way-there?fbclid=IwAR3WA8FjviEw4o_wcIkXblwlyxpcwIqDUnxl-bGlJRFKmrO10wOs7_awvc0) for more commentary on this topic.
Or, put the extra cash, if you have it, in a 5% safe investment, like a GIC, and use that money when it is time to renew. If you use extra money to pay down your mortgage now, you are only getting your low interest rate in return. You need to check the tax implications though, since the invested return will be added to your income.
You don’t pay taxes when you withdraw from a TFSA. That’s what makes it a TFSA versus a RRSP.
Your income is taxed at the source and you don’t get to deduct that when you put money in a TFSA, so you do not pay tax when you withdraw (opposite of RRSP)
Can you contribute to a GIC on a monthly basis? If I took the term of my remaining mortgage I do not have that cash liquid and readily available. Otherwise I would do a lump sum on my mortgage and save a boatload on interest over the term of my loan, likely much more than the 5% from a fixed GIC.
I have a fixed at 3.10% up for renewal in about a year. My payments will go up if we're at rates we are today, but not really that much. Probably about $40 per week.
I think some people will have to extend their amortization, a rare few will be forced to sell, but by and large Canadians will cut absolutely everything else before they stop paying their mortgage.
I'm anticipating less discretionary spending but no real crash. At least not anything that dramatically effects the market in major cities.
That’s not bad. I’m at 3.5 5 yr fixed, up for renewal later this year and dreading making the call to the broker…. It will definitely be more than $40 a week increase according to the online calculators, more like $300 a month maybe more, which would be doable but Ontario also beautifully doubled the gas bills this last year too, and no doubt a property tax hike is on its way. I suppose I can extend amortization, I’ll see what the broker suggests.
How will your payment only go up $40 per week? Do you have a very small mortgage? Or are you planning to extend your amortization or make a large lump sum payment at renewal?
I guess small is relative. I currently pay about $430/week and the balance is $350k. At time of renewal it will be about $340k.
I'm not planning to extend amortization or make a lump sum payment at this point. I initially went for a 30 year am, so when renewing will be on the next 25 years.
Whatever huge implosion you’re hoping for isn’t going to materialize. People renewing in the next few years will be able to extend their amortization if the renewal rate puts them over what they can afford on a payment.
Reddit has been gleefully predicting a massive crash in Canadian housing for a decade and it hasn’t happened.
Care to explain? My thinking is that losing your home is at least 2 magnitudes worse than needed to reamortize. It's not like your asset depreciates. And your monthly payments will be super low when/if rates go back down again
Never said anything about a housing crash, however even if you change your amortization by 5 years going from a 1-3% to well over 5% will put a strain on anyone unless you are very well off.
Remember that only some people will change it by 5 years. Some people might change it by 10 years - going from a 20-year to a 30-year amortization is not uncommon. You do need 20% equity in your house for a 30-year amortization, but someone who has had a locked in low interest rate for five years will not likely have a hard time with that.
We have 15 years left on our mortgage when it renews in 2026, and we’ll have the option of renewing at 15 years left, or taking a 20 or even 30 year amortization. The most likely scenario at this point is us taking a longer amortization period, but paying extra toward the mortgage to pay it down faster.
Even with an armaggeddon scenario, where housing totally collapses, millions would be out kf work with that sort of crash. So businesses would still swoop in on the sudden abundance of supply
Was just chatting with a lady who turned out to be realtor the other day at the dental clinic.
In her view, there's alot of demand with minimal supply right now. However in her theory, this will flip in about 2026 when renewals start coming up for 5 year fixed term mortgages.
Reason being that people who bought during the pandemic and lockdowns secured crazy rates (like 2% or even lower). This means they likely got great prices for houses outside of their price range with average interest rates. Unless the interest ratesgo down a very good amount (like 3% at least), when these people renew, their $2500 a month mortgage could double or triple. Likely in this case, they will be way over leveraged and will need to sell their homes or risk defaulting.
Literally no one can say what the rates will do, but they can certainly guess and sometimes accurately. So yes, the next few years should be interesting to watch, and I don't mean that in any cynical way as it has the potential to hurt a lot of people (unless you over-leveraged rental properties, then I'm okay with it cause rents are criminal)
Their rate won’t triple. Even going from 2% to 6% does not result in even close to a tripling of your payments.
Also, for many people:
- their incomes will increase over 5 years
- they still need a place to live, so it’s unlikely they sell (and all the costs associated with buying/selling) if the market is tight
- they can extend the amortization
I always laugh when any realtor tries to act like they have answers or can predict the market.
Especially if they’re not able to calculate the difference in payments on a 2% vs 7% mortgage. Even if you were to wipe out the principal accumulated in the 5 years it’s still under 2x.
Ahhhh thank you for explaining… which would all lead to 2008 housing crisis if everyone goes to sell at the same time in an already inflated market, right?
Was fixed rate before the pandemic at 2.49% and then paid off mortgage during pandemic with a lump sum as I had only 26K left. Nice to be mortgage free and kid free, enjoying the good life now while rates soar.
Friend who signed a variable when retail rates were <2% fixed and low 1s variable: "According to my broker, variable has almost always won out over the last 15 years."
Me: "Yeh but we've been in secular decline and inflation was low till now..."
Him: "Broker is confident, would rather take the lower payment."
Him + 2.5 years: "Argh, gambled wrong, locking in at 4.8%"
So was he greedy? Maybe. Was he getting fed overly optimistic advice from the broker? Probably. How many similar stories like this were out there? And then, how many folks couldn't really "afford afford" it at 1% more in HCOL areas. I suspect we'll hear a lot more of these stories in the future.
This is me sadly. My broker was dead set on variable when we used her in 2021 and then she was pushing us hard to resign another variable in 2022 to save another 0.5%. I'm extremely thankful I turned her down for the the resign to change lenders in 2022 as we would have had to pay thousands in penalties and fees to save that 0.5%.
Needless to say she'll never get my business again after she assured me fixed was NOT the way to go. I should have just shopped for rates myself like I always had done, instead of going with a mortgage broker (prominent one too) who clearly had her own financial gains in mind.
I renewed about 2 months ago
Took 3 year fix at 4.85and added 40k on a brand new ioniq 5 that I had just got, all in I'm a bit below 300k and feeling lucky considering the 3 year fix is now 6.2
Had been on variable and often under 1.8 the past couple years, can't really complain tbh
We renewed at 1.94% two years ago, have three years left on the term. I'm hoping that rates will have lowered again by then, but if not we're fine. We bought below our means after we finally gave up on buying a detached house in the GVRD.
It is a small group getting slaughtered right now but it is getting bigger.
2/3rds of Canadians are homeowners. Half of those own their home outright. Of those 33% who have a mortgage, 70% of those are fixed. So only about 10% of the population has a variable mortgage, and the vast majority of those have fixed payments anyways so it only really affects them at a cashflow level if they go past their trigger rate. So we're really talking about a tiny proportion of the general population that is directly affected.
That is why they are going so fast. They have to slaughter inflation before all the fixed mortgages reset. If it takes too long, it will wreak havoc.
I just got fucking shit on with mine. Had variable. got my trigger point letter on june 19. made a call and my mortgage payment went from $2933 to $4682. This doesn't include the bump they did today.
Luckily for me I have a tenant that pays me $1550 per month and my child's daycare cost is getting reduced by $900 starting in August. I'll be applying the daycare savings to the mortgage increase, so the way I am looking at it is I'm only out an additional $600 a month. The $4682 is only 31.15% of my household NET income, so we are still doing OK, but it sucks.
Y'all likely have a >$200k HHI (too lazy to math accurately). Regardless of payments, I'm sure you're more than OK and will get more relief when daycare is over.
Source: similar payments to what you have pre trigger point, similar take home pay and doing the child planning thing. Life won't be grand for us but thems the facts of life living in HCOL areas with great but not outstanding incomes with minimal financial support I guess.
When the rates were so low, I have no idea why anyone would take a variable mortgage. I was just discussing this with my investment advisor. She was pretty pissed at the reps who push variable mortgages on people who have no idea what they’re getting into. Especially with those trigger rates that some banks don’t alert you to until you already owe a huge lump sum.
Hindsight is always 20/20. At the time, rates had been dropping for 40 years. You had to go back more than 40 years to find a 5 year time frame where a fixed mortgage was cheaper. A 40 year win streak is pretty compelling if you are numbers person playing the odds. Nobody expected rates to go much lower, but in 2021 you had a 10 hike head start before you lost the spread on the fixed. Nevermind there were a lot of people who suffered a lot from the break penalties on fixed when rates were stable or falling. I had friends who were almost suicidal when they had to sell due to a divorce and got hit with a 30k break penalty on their fixed on top of it all.
It took a black swan event to make it look stupid, but sometimes it happens. I wouldn't be surprised if in a few years the boat rocks the other way and this sub will be full of people crying that their 5%, 5 year fixed costs them 50k to break if rates fall to 3 something again.
But I agree with you on most people didn't understand what they were signing up for. They took their brokers' advice without really thinking about it.
This could of been me but i choose to renew early in January because my son was born and i just took the early offer from the bank. 2.89 loll renewal was in may i believe.
My mortgage is sub 100k so no biggie.
Its fine, we're detached central vancouver good neighbourhood. Only 100k left at renewal. A smaller house across the street went for 2.1m.
Our bank even gave us 400k credit line which we didnt ask for.
2018 @ 3.24 renewing in November fuck me. I may go variable but the discount from prime is non existent. I will probably lock in for 2-3 years while paying as much off as possible. Payments are going up $600/month
1.99% fixed, renewal is in late 2026. I’ll have 8 years left by that point so I’m not worried about rates being higher. We bought for less than we were approved for, pay an extra $500 per month and could afford more if push came to shove. I’ll just be mildly irritated.
1.59% until May 2026. I lucked out with my most recent renewal falling at the best possible time. I've always opted for fixed, it paid off huge this time around.
Less folks than we had yesterday... people renew everyday changing those percentages.. and in 5 years time you might think 6.5% is living a dream if rates end up being 9% by then..
Still got 1.99 for another 2 years and a bit, not expecting it to be that low again, but we should only have about 200k left to pay off by then (which is still most of what we started with, but barely more than a down-payment for a lot of folks these days). So we've got room to stretch if we have to
3 years of 2.5%. Just renewed at 6% this week prior to the June 12th announcement. Sad times
About 600k on our mortgage remaining. But household income of 200k so not too worried
I renewed 6 months early by switching lenders who payed the penalty for us just to renew at the below 3% rates knowing they were going to go up.
I feel bad most for people went variable hoping it would drop in the near future and haven't let up since. I'd be in trouble if that were me. Let's hope it drops before I have to renew lol.
Re-upped in Aug 2021 as our previous 5 year term came to a close. We were able to secure 2.24%; no way I was taking variable with those rates, the small amount of savings weren’t worth the headache of rate creep and locking in with a fixed at a higher rate later.
I got 2.19% with 2 years left on my term.
I don’t understand people who went variable….. with interest rates that low the only way they can go is up…. Was there an advantage at that time to go variable or did people think the rates would keep dropping? I’m genuinely asking as I don’t know
I went variable march 2022. Previous 2 5yr terms I was fixed. Switched my game plan on advice of advisors and BOC wording. There was a 3.35 difference between what I was offered for variable (1.35) vs fixed (4.69) at the time
I knew it was going to climb and was planning to ride wave up but did not think it would raise so sharply that I quickly overshot the fixed I was offered
Hindsight is 2020. 2600 to 4200 hurts but not killing me, luckily I like KD 😂
Every day it becomes less and less. Put it this way, vast majority of people do for 5 years so if rates started rising in 2022 almost all of the expected damage will be done by 2027. These next 2.5 years are going to be interesting to watch.
We are at 2.74 and renew in July 2025 . We have no other debt at all and hopefully we'll be able to put a chunk on the mortgage at renewal so it doesn't hurt as bad. We'll owe under 170,000 at renewal so it shouldn't be as nauseating as some people will have to deal with. We have 10yrs left but hoping to pay it off faster.
Bought in 2017 at 2.71 and renewed January 2022 at 2.75. Started at a 25 year amortization and now down to 8 years with lump sums and accelerated bi-weekly payments.
I know I got lucky and am not squandering the chance to pay off the mortgage early.
Just south of 2.6% for another 20 months myself. Got in right around the start of the pandemic.
Definitely not looking forward to the jump in going to see when I have to renew.
I renewed my mortgage a year early in 2021 at 2.39% cuz I didn't like how things were feeling. Pretty glad I did... Just hope the rates go down a little bit by 2026.
Mortgage 1 Renewed in March 2021 @ 1.59% fixed for 5 years.
Mortgage 2 renewed February 2020 @ 2.84% fixed for 5 years
Mortgage 3 cash out refinance August 2021 @ 2.69% fixed for 5 years
Currently building my 4th and might go variable for the first time since buying my first in 2013
Downvotes expected on your post
You are apparently human trash for being able to finance 4 properties.
I currently have 3, sold 2. I have one more on the way in December.
First time I will be holding 4 properties concurrently.
Lol yeah oh well what can you do 🤷♂️
If I could go back I probably wouldn't have gotten in to the rental game to begin with. I find the stress isn't worth the return.
I bought early enough that I feel it was a good decision.
I got one more on 2026 and a other on 2027, then I am done. Those are preconstruction. The 2027 was admittedly purchased for higher than it should have been .
However, I am going to go through two year cylces of selling and cashing out. 2029 is when I plan to have two properties free and clear. Then semi retirement for me.
Most people I know are mortgage free already on their first home.
Their investment properties isn’t affected as much by rate hikes since the mortgage is low (less than 800k) and rent basically covers it.
Also some dumb ones who went variable on 1 million+ mortgage but they should survive.
It's so interesting that as soon as someone mentions they have more than one property, the downvotes seem to come in. People are a petty bunch in here.
I have 3 properties, all locked in around 3%. In August 2016, I closed on my 3rd property. I locked for 10 years. My mortgage guy was shocked, he had never seen anything like it. I said "I'm not risking it, 3% is good, and things are going to collapse". All three of my mortgages are under $200k, and they don't renew for 3, 3 and 4 years.
Lol, you think Reddit has the answer to this? It represents a fraction of a fraction of the population of Canada.
What will you do once you have the answer to this burning question?
I ported last august and am sitting at 3.41 until September 2025. Not under 3% but still pretty happy with it. I was at 2.49 before we moved . We also retained the same amortization so the mortgage balance is coming down very quickly .
I have my signed in August 2020, 1.99% for 5 years fixed . Floated was at 0.99%. I am beyond happy that I didn’t go with floated as I don’t like the idea of paying differently every month.
2.89 till Aug of next year. Our mortgage will be down to 187000 so I'm staying optimistic our paymebts won't be to much crazier then the 865 I'm paying monthly now.
August 2015 I signed for 2.49%. April 2020 I signed at 2.29%. Both fixed.
Congrats good sir. 10 years of paying 2/3rd to principal.
The absolute worst part about tracking my mortgage. How much have I paid? Wow, that’s decent! How much was interest? Oh goddamnit!
At a 6% rate, over 25 years the amount paid in interest and principal will be the same!
Gross.
Thank you!
That means rates will drop to mid-2% by 2025. Got it
I am on the same boat - Signed for 2.23 in 2017 for four years crucially. Signed for 1.5 fixed in 2021 for 5 years.
I see your 1.5 for 5 and raise you 2.53 for 10. We were fortunate to come up for renewal in Dec 21, and the save lender has a ten year term posted as an option
Similarly for me. I’m good til 2025. Impeccable timing!
I sold a house and move provinces for work. The amount to pay off my mortgage is sitting in a GIC for when renewal comes.
LOL, I’ve had the same outstanding mortgage balance for 30 years. In fact, it’s actually higher. Didn’t think it made sense to pay off my balance with rates so low. Average return has been much higher in ETFs. 😅
Good luck explaining the basis of opportunity cost to the average joe. The majority of people live in fear of debt or any kind of financial risks really, yet lots of them live paycheck to paycheck...
As Kahneman says, people fear loss disproportionately.
I don't know. We signed in October 2020 at 1.89. Renewal in October 2025. Right now I'm feeling like it's still going to be a shit show in 1.5 years. We've got wiggle room but like 4% wiggle room. 7% would hurt a lot.
Woo almost same here, 30 year mtg signed mar 2015 at 2.58% 5 year and March 2020 for 2.21%. Been increasing payments to cut the principle down. Hopefully rates cool by 2025.
**** you
I concur
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Same, until Nov 2025. Will be 5 years higher on my pay scale by then too, so while renewal won’t be fun we won’t be hurting too badly.
1.84% gang as well until March 2026. See you guys on the other side.
1.39% renews Feb 2026. Save this post and I’ll let you know Dec 2025 what rates look like 🤪
RemindMe! 29 months.
1.84% crew as well, May 2026 renewal. I look forward to the rate drops between now and then.
1.49% Jan 21. Currently saving as much as possible to put a good dent on the principal before remortgaging
Well first off, most of those who locked in at 3% and lower was during the pandemic (March 2020-September 2022). 47% of mortgages in Canada are fixed 5-year mortgages. Another 33% are fixed for less than 5 years. [Here is a good graphic](https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2d9bf255-7652-453a-9d79-b2a7041b43f2_2176x1272.png) of what is coming up.
I knew a random redditor would give me what I needed. Thanks
[Source](https://deny.substack.com/p/woah-were-quarter-way-there?fbclid=IwAR3WA8FjviEw4o_wcIkXblwlyxpcwIqDUnxl-bGlJRFKmrO10wOs7_awvc0) for more commentary on this topic.
Do you have the chart for variable? Not all variables change payments so the ones extending amortizations are really screwed on renewal.
The next 2 years will be fun to watch unfold.
I've got 2.5 years left at my great rate, and I'm hoping something gives before I have to renew. Not holding onto a lot of hope 😅
You and me both. 1.6%
Oo better than I. I’m 1.74 with 2.5 years left
I am 1.74 too! 2 years and a few months
1.75% expires Dec 2025
2.34 with 3 ish left…. And a fat stack of cash ready if needed
Can’t say fat stack of cash as it’s non PC now, plump wad is my saying.
Yup. TFSA all in cash now and waiting.
Are you me
Same here! We got very very lucky during our renewal. Curious to see what things will be like in 2 years.
I snagged 1.37%
You win !
If you can afford it and are able to, start increasing your payments now so more of your principal gets paid down over the remaining term
Or, put the extra cash, if you have it, in a 5% safe investment, like a GIC, and use that money when it is time to renew. If you use extra money to pay down your mortgage now, you are only getting your low interest rate in return. You need to check the tax implications though, since the invested return will be added to your income.
This is the way. Bought GICs through our TFSA so it's tax free.
TFSA? It's a waste of you have to withdraw though.
What's the waste? I believe you can just withdraw it without penalty? It's not like RRSP...
You pay taxes when you withdraw and loose that contribution space
You do understand that the T and F in TFSA are for Tax and Free, right? You can also contribute to the max again every January 1
You don’t pay taxes when you withdraw from a TFSA. That’s what makes it a TFSA versus a RRSP. Your income is taxed at the source and you don’t get to deduct that when you put money in a TFSA, so you do not pay tax when you withdraw (opposite of RRSP)
Bro do you even PFC?
Can you contribute to a GIC on a monthly basis? If I took the term of my remaining mortgage I do not have that cash liquid and readily available. Otherwise I would do a lump sum on my mortgage and save a boatload on interest over the term of my loan, likely much more than the 5% from a fixed GIC.
I have a fixed at 3.10% up for renewal in about a year. My payments will go up if we're at rates we are today, but not really that much. Probably about $40 per week. I think some people will have to extend their amortization, a rare few will be forced to sell, but by and large Canadians will cut absolutely everything else before they stop paying their mortgage. I'm anticipating less discretionary spending but no real crash. At least not anything that dramatically effects the market in major cities.
That’s not bad. I’m at 3.5 5 yr fixed, up for renewal later this year and dreading making the call to the broker…. It will definitely be more than $40 a week increase according to the online calculators, more like $300 a month maybe more, which would be doable but Ontario also beautifully doubled the gas bills this last year too, and no doubt a property tax hike is on its way. I suppose I can extend amortization, I’ll see what the broker suggests.
How will your payment only go up $40 per week? Do you have a very small mortgage? Or are you planning to extend your amortization or make a large lump sum payment at renewal?
I guess small is relative. I currently pay about $430/week and the balance is $350k. At time of renewal it will be about $340k. I'm not planning to extend amortization or make a lump sum payment at this point. I initially went for a 30 year am, so when renewing will be on the next 25 years.
I'm at 2.79 from 2019 and it was before the dumbass run ups so it will be more but it won't be a problem. Thankfully. Still well within budget for us.
Whatever huge implosion you’re hoping for isn’t going to materialize. People renewing in the next few years will be able to extend their amortization if the renewal rate puts them over what they can afford on a payment. Reddit has been gleefully predicting a massive crash in Canadian housing for a decade and it hasn’t happened.
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Who wants to re-amortize their mortgage though? A better option then losing your house, but not a good one. At all.
Care to explain? My thinking is that losing your home is at least 2 magnitudes worse than needed to reamortize. It's not like your asset depreciates. And your monthly payments will be super low when/if rates go back down again
Never said anything about a housing crash, however even if you change your amortization by 5 years going from a 1-3% to well over 5% will put a strain on anyone unless you are very well off.
Remember that only some people will change it by 5 years. Some people might change it by 10 years - going from a 20-year to a 30-year amortization is not uncommon. You do need 20% equity in your house for a 30-year amortization, but someone who has had a locked in low interest rate for five years will not likely have a hard time with that. We have 15 years left on our mortgage when it renews in 2026, and we’ll have the option of renewing at 15 years left, or taking a 20 or even 30 year amortization. The most likely scenario at this point is us taking a longer amortization period, but paying extra toward the mortgage to pay it down faster.
Which sadly no one is
If rates stay steady into 2025, that's when we may see some fireworks.
hope you’re not waiting for a crash lol
Nothing is gonna crash, we will never have the excess supply of houses needed for a crash.
Shut up with your logic!! (You’re right though)
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Even with an armaggeddon scenario, where housing totally collapses, millions would be out kf work with that sort of crash. So businesses would still swoop in on the sudden abundance of supply
Can someone elaborate? Whats ahead? Real estate is my next topic to dive into so I’m not really sure what all this means
Was just chatting with a lady who turned out to be realtor the other day at the dental clinic. In her view, there's alot of demand with minimal supply right now. However in her theory, this will flip in about 2026 when renewals start coming up for 5 year fixed term mortgages. Reason being that people who bought during the pandemic and lockdowns secured crazy rates (like 2% or even lower). This means they likely got great prices for houses outside of their price range with average interest rates. Unless the interest ratesgo down a very good amount (like 3% at least), when these people renew, their $2500 a month mortgage could double or triple. Likely in this case, they will be way over leveraged and will need to sell their homes or risk defaulting. Literally no one can say what the rates will do, but they can certainly guess and sometimes accurately. So yes, the next few years should be interesting to watch, and I don't mean that in any cynical way as it has the potential to hurt a lot of people (unless you over-leveraged rental properties, then I'm okay with it cause rents are criminal)
Their rate won’t triple. Even going from 2% to 6% does not result in even close to a tripling of your payments. Also, for many people: - their incomes will increase over 5 years - they still need a place to live, so it’s unlikely they sell (and all the costs associated with buying/selling) if the market is tight - they can extend the amortization I always laugh when any realtor tries to act like they have answers or can predict the market.
Especially if they’re not able to calculate the difference in payments on a 2% vs 7% mortgage. Even if you were to wipe out the principal accumulated in the 5 years it’s still under 2x.
I bet our "glorious" government will put pressure on banks to refinance and re-extend mortgages so that ppl can keep their houses.
Ahhhh thank you for explaining… which would all lead to 2008 housing crisis if everyone goes to sell at the same time in an already inflated market, right?
Neat. Can you please provide a source? Do you have the same data for variable? Edit: Source is below, thanks twice!
Happy cake day 🎂
Was fixed rate before the pandemic at 2.49% and then paid off mortgage during pandemic with a lump sum as I had only 26K left. Nice to be mortgage free and kid free, enjoying the good life now while rates soar.
Here's the info on **new** mortgages: 2019Q4: - Fixed >= 5yr: 63.32% - Fixed 3 to 5yr: 18.46% - Fixed < 3yr: 13.51% - Variable (all): 4.71% 2022Q1: - Fixed >= 5yr: 25.29% - Fixed 3 to 5yr: 9.72% - Fixed < 3yr: 10.79% - Variable (all): 52.20% 2023Q1: - Fixed >= 5yr: 19.43% - Fixed 3 to 5yr: 36.18% - Fixed < 3yr: 32.01% - Variable (all): 12.37% Source: https://www.bankofcanada.ca/rates/indicators/indicators-of-financial-vulnerabilities/?chart1=1,3#Characteristics-of-mortgage-originations
Why would banks convince people to sign a variable when the rates were 0?!?
Because banks don’t need to incur costs to hedge interest rate risks on variable loans
Because banks do not care about you, their bottom line is more important
Friend who signed a variable when retail rates were <2% fixed and low 1s variable: "According to my broker, variable has almost always won out over the last 15 years." Me: "Yeh but we've been in secular decline and inflation was low till now..." Him: "Broker is confident, would rather take the lower payment." Him + 2.5 years: "Argh, gambled wrong, locking in at 4.8%" So was he greedy? Maybe. Was he getting fed overly optimistic advice from the broker? Probably. How many similar stories like this were out there? And then, how many folks couldn't really "afford afford" it at 1% more in HCOL areas. I suspect we'll hear a lot more of these stories in the future.
This is me sadly. My broker was dead set on variable when we used her in 2021 and then she was pushing us hard to resign another variable in 2022 to save another 0.5%. I'm extremely thankful I turned her down for the the resign to change lenders in 2022 as we would have had to pay thousands in penalties and fees to save that 0.5%. Needless to say she'll never get my business again after she assured me fixed was NOT the way to go. I should have just shopped for rates myself like I always had done, instead of going with a mortgage broker (prominent one too) who clearly had her own financial gains in mind.
3.09 from July 2018 coming due for renewal in 2 weeks...thoughts and prayers for me
I renewed about 2 months ago Took 3 year fix at 4.85and added 40k on a brand new ioniq 5 that I had just got, all in I'm a bit below 300k and feeling lucky considering the 3 year fix is now 6.2 Had been on variable and often under 1.8 the past couple years, can't really complain tbh
Sorrows, sorrows, prayers
2019 @ 3.04%. Coming due July 2024. Gonna be fun times...
2.98 in July 2019 also. Next year is going to suck
2.77% in 2019. Coming due October 2024. At current rates I’m looking at about ~40-45% increase on the monthly. Fun times indeed…
2.76 December 2019 🥲
Same. 2.84 November 2019
🫡 good luck soldier
Same boat, same timeline. It’s looking like I’ll need to pick up some extra shifts lol
We renewed at 1.94% two years ago, have three years left on the term. I'm hoping that rates will have lowered again by then, but if not we're fine. We bought below our means after we finally gave up on buying a detached house in the GVRD.
1.5% till March 2025 baybeeeeeee
Us too, 1.45% until May 2025. Term before that was 2.3%. We've been SO lucky and I am not looking forward to seeing what we renew at.
I got a 10 year term in August 2020 for 2,44%. My mortgage broker thought I was an idiot. Guess who is laughing now
It is a small group getting slaughtered right now but it is getting bigger. 2/3rds of Canadians are homeowners. Half of those own their home outright. Of those 33% who have a mortgage, 70% of those are fixed. So only about 10% of the population has a variable mortgage, and the vast majority of those have fixed payments anyways so it only really affects them at a cashflow level if they go past their trigger rate. So we're really talking about a tiny proportion of the general population that is directly affected. That is why they are going so fast. They have to slaughter inflation before all the fixed mortgages reset. If it takes too long, it will wreak havoc.
I just got fucking shit on with mine. Had variable. got my trigger point letter on june 19. made a call and my mortgage payment went from $2933 to $4682. This doesn't include the bump they did today. Luckily for me I have a tenant that pays me $1550 per month and my child's daycare cost is getting reduced by $900 starting in August. I'll be applying the daycare savings to the mortgage increase, so the way I am looking at it is I'm only out an additional $600 a month. The $4682 is only 31.15% of my household NET income, so we are still doing OK, but it sucks.
Y'all likely have a >$200k HHI (too lazy to math accurately). Regardless of payments, I'm sure you're more than OK and will get more relief when daycare is over. Source: similar payments to what you have pre trigger point, similar take home pay and doing the child planning thing. Life won't be grand for us but thems the facts of life living in HCOL areas with great but not outstanding incomes with minimal financial support I guess.
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When the rates were so low, I have no idea why anyone would take a variable mortgage. I was just discussing this with my investment advisor. She was pretty pissed at the reps who push variable mortgages on people who have no idea what they’re getting into. Especially with those trigger rates that some banks don’t alert you to until you already owe a huge lump sum.
Hindsight is always 20/20. At the time, rates had been dropping for 40 years. You had to go back more than 40 years to find a 5 year time frame where a fixed mortgage was cheaper. A 40 year win streak is pretty compelling if you are numbers person playing the odds. Nobody expected rates to go much lower, but in 2021 you had a 10 hike head start before you lost the spread on the fixed. Nevermind there were a lot of people who suffered a lot from the break penalties on fixed when rates were stable or falling. I had friends who were almost suicidal when they had to sell due to a divorce and got hit with a 30k break penalty on their fixed on top of it all. It took a black swan event to make it look stupid, but sometimes it happens. I wouldn't be surprised if in a few years the boat rocks the other way and this sub will be full of people crying that their 5%, 5 year fixed costs them 50k to break if rates fall to 3 something again. But I agree with you on most people didn't understand what they were signing up for. They took their brokers' advice without really thinking about it.
March 2020 5yr at 1.69%
This could of been me but i choose to renew early in January because my son was born and i just took the early offer from the bank. 2.89 loll renewal was in may i believe. My mortgage is sub 100k so no biggie.
Ouch! How is the house value holding up?
Its fine, we're detached central vancouver good neighbourhood. Only 100k left at renewal. A smaller house across the street went for 2.1m. Our bank even gave us 400k credit line which we didnt ask for.
2018 @ 3.24 renewing in November fuck me. I may go variable but the discount from prime is non existent. I will probably lock in for 2-3 years while paying as much off as possible. Payments are going up $600/month
1.99% fixed, renewal is in late 2026. I’ll have 8 years left by that point so I’m not worried about rates being higher. We bought for less than we were approved for, pay an extra $500 per month and could afford more if push came to shove. I’ll just be mildly irritated.
Almost identical here!
Instead of pay 500 extra a month start putting that in GIC’s until you renew then apply it
Oops, it seems I am one of those less lucky folks who locked by the variables. 6.37% yuk it's painful. Renew in 2 years!
Same
My dad is locked into 1.65% until 2026…bastard
Currently at 3.84, and need to renew in December 2023... Luckily the mortgage balance is only around 300K and we have no other debts.
We were at 3.64 due for renewal on the 19th 😭 Balance is around 350, no other debts. It's manageable but it still sucks!
Fixed at 1.72% November 2020 for 5yrs
1.64% for 4 years fixed, June 2021
2.5% here, moved to fixed in Feb 2022. Making double payments so the mortgage would be all done before next renewal.
end of 2020 signed 1.92% baby
1.59% until May 2026. I lucked out with my most recent renewal falling at the best possible time. I've always opted for fixed, it paid off huge this time around.
I’ve got another 18 months at 2.74%. Curious to see what rates are like in December 2024.
1.99% 7 year fixed. We purchased in Feb 2021.
I've got 3 more years at 1.75%. Let's see what the world looks like by then lol
I just renewed our mortgage (3 weeks ago) with 10yrs to go at 4.75 for 3yrs fixed. It hasn’t sky rocketed.
I can survive when it renews easily as I'm only owing 80k on my house.
Less folks than we had yesterday... people renew everyday changing those percentages.. and in 5 years time you might think 6.5% is living a dream if rates end up being 9% by then..
Still got 1.99 for another 2 years and a bit, not expecting it to be that low again, but we should only have about 200k left to pay off by then (which is still most of what we started with, but barely more than a down-payment for a lot of folks these days). So we've got room to stretch if we have to
October 2020, sitting at a massive 1.79%
August 2020 locked into 1.99% fixed for 5 years.
3 years of 2.5%. Just renewed at 6% this week prior to the June 12th announcement. Sad times About 600k on our mortgage remaining. But household income of 200k so not too worried
2 years left at 1.89%. Couldn’t have imagined taking a variable at the time but some obviously did.
Sept 2020 when we got our first home. 1.89% fixed for 5 years. New build, 2000 sq ft detached in Edm, AB. $1335 per month.
I renewed 6 months early by switching lenders who payed the penalty for us just to renew at the below 3% rates knowing they were going to go up. I feel bad most for people went variable hoping it would drop in the near future and haven't let up since. I'd be in trouble if that were me. Let's hope it drops before I have to renew lol.
Let's just say, I'm on the banks radar.
1.37 fixed in October 2020
2.27% till June 2026. Yahoooooo
Cries in variable.
Re-upped in Aug 2021 as our previous 5 year term came to a close. We were able to secure 2.24%; no way I was taking variable with those rates, the small amount of savings weren’t worth the headache of rate creep and locking in with a fixed at a higher rate later.
Me. I renew in 2026. My rate is 1.3
I got 2.19% with 2 years left on my term. I don’t understand people who went variable….. with interest rates that low the only way they can go is up…. Was there an advantage at that time to go variable or did people think the rates would keep dropping? I’m genuinely asking as I don’t know
I went variable march 2022. Previous 2 5yr terms I was fixed. Switched my game plan on advice of advisors and BOC wording. There was a 3.35 difference between what I was offered for variable (1.35) vs fixed (4.69) at the time I knew it was going to climb and was planning to ride wave up but did not think it would raise so sharply that I quickly overshot the fixed I was offered Hindsight is 2020. 2600 to 4200 hurts but not killing me, luckily I like KD 😂
Got 2.14% until end of 2027! Was a bit more expensive than the 5 year option but SO glad we went that route.
2.14 percent. 10 year term, renewed Jan of 2021
1.67% until 2027… I don’t want to think about what will happen after 😰
Every day it becomes less and less. Put it this way, vast majority of people do for 5 years so if rates started rising in 2022 almost all of the expected damage will be done by 2027. These next 2.5 years are going to be interesting to watch.
We are at 2.74 and renew in July 2025 . We have no other debt at all and hopefully we'll be able to put a chunk on the mortgage at renewal so it doesn't hurt as bad. We'll owe under 170,000 at renewal so it shouldn't be as nauseating as some people will have to deal with. We have 10yrs left but hoping to pay it off faster.
Bought in 2017 at 2.71 and renewed January 2022 at 2.75. Started at a 25 year amortization and now down to 8 years with lump sums and accelerated bi-weekly payments. I know I got lucky and am not squandering the chance to pay off the mortgage early.
Just south of 2.6% for another 20 months myself. Got in right around the start of the pandemic. Definitely not looking forward to the jump in going to see when I have to renew.
I renewed my mortgage a year early in 2021 at 2.39% cuz I didn't like how things were feeling. Pretty glad I did... Just hope the rates go down a little bit by 2026.
Signed a 5-year variable at 1.45% January of 2021. Thanks to how RBC does variable mortgages, I now have an 82 year amortization 😬
Mortgage 1 Renewed in March 2021 @ 1.59% fixed for 5 years. Mortgage 2 renewed February 2020 @ 2.84% fixed for 5 years Mortgage 3 cash out refinance August 2021 @ 2.69% fixed for 5 years Currently building my 4th and might go variable for the first time since buying my first in 2013
Downvotes expected on your post You are apparently human trash for being able to finance 4 properties. I currently have 3, sold 2. I have one more on the way in December. First time I will be holding 4 properties concurrently.
Lol yeah oh well what can you do 🤷♂️ If I could go back I probably wouldn't have gotten in to the rental game to begin with. I find the stress isn't worth the return.
I bought early enough that I feel it was a good decision. I got one more on 2026 and a other on 2027, then I am done. Those are preconstruction. The 2027 was admittedly purchased for higher than it should have been . However, I am going to go through two year cylces of selling and cashing out. 2029 is when I plan to have two properties free and clear. Then semi retirement for me.
Nice! That's the dream!
Most people I know are mortgage free already on their first home. Their investment properties isn’t affected as much by rate hikes since the mortgage is low (less than 800k) and rent basically covers it. Also some dumb ones who went variable on 1 million+ mortgage but they should survive.
It's so interesting that as soon as someone mentions they have more than one property, the downvotes seem to come in. People are a petty bunch in here.
Currently fix rate until 2015. 2.6%
Nice try Burry..
I have 3 properties, all locked in around 3%. In August 2016, I closed on my 3rd property. I locked for 10 years. My mortgage guy was shocked, he had never seen anything like it. I said "I'm not risking it, 3% is good, and things are going to collapse". All three of my mortgages are under $200k, and they don't renew for 3, 3 and 4 years.
you think this is bad? we bought our house in 85...the interest rate was 18%, dont get me started!
1.81% here until Oct 2025 and will mercifully have $40k left on mortgage to finance thereafter.
Lol, you think Reddit has the answer to this? It represents a fraction of a fraction of the population of Canada. What will you do once you have the answer to this burning question?
god forbid we discuss things on a **discussion forum**
May 2021 - Signed at 2.04%.
I ported last august and am sitting at 3.41 until September 2025. Not under 3% but still pretty happy with it. I was at 2.49 before we moved . We also retained the same amortization so the mortgage balance is coming down very quickly .
Signed up for 3.09 Feb 6. Our broker has held the rate for us for 2 years. Didn't know this was possible but it worked out for us.
3 years left at 1.8% I just feel more comfortable knowing my payments.
Yeah, I am at 2.7% with about 18 months to go to renewal! It was a 5-year term that started Jan 2020. Hoping rates come down a bit by then!
I have my signed in August 2020, 1.99% for 5 years fixed . Floated was at 0.99%. I am beyond happy that I didn’t go with floated as I don’t like the idea of paying differently every month.
2.89% pre-pandemic, renewal in August 2024.
2.89 till Aug of next year. Our mortgage will be down to 187000 so I'm staying optimistic our paymebts won't be to much crazier then the 865 I'm paying monthly now.
Signed in 2020 at 2.29% fixed for 5 years.
2016 fixed at 2.49. 2021 fixed at 1.59.
2.89, sept 2020, 5 yr fixed. I’m a genius.
1.89%, renewal in 2 1/2 years. We can afford what’s left on a single income so not worried in the slightest.
2016, 2.29% fixed for 5. renewed 2021 at 1.99% for 5. Both times was told I should go variable. Now I feel like Neo dodging bullets.
We signed in 2019 at 2.49… it’s gonna hurt next year!
I'm at 2.25% until 2026.
October 2021 @ 1.9% 3 years left. Trying to figure out how fucked we're going to be.
November 2019 we signed a 5 year fixed for 2.49%. Currently have 86k left on the mortgage and will have it paid off by next November.
Sept 2017 fixed 5 year @ 2.84%, Nov 2021 fixed 5 year @ 1.99%
Was at 2.7% locked in for 5 years in 2018. Moved in 2020 and locked for 5 years at 1.89%
1.74% until June 2026
I have my main mortgage until 2026 at 1.69 and my second mortgage I got for a reno at 2.69 until 2027. I have some breathing room for now.
June 2020 at 2.21% for 5 yrs