Topic: The money thread

[pi314]

It seems in Ontario, land tax assessments put little, if at all, penalty, on depth.  Lot of towns, planned in the mid 1800s in southern Ontario, have really deep lots.  Probably 250 feet on average.

Well it makes for easy road widening if the necessity arises.. no need to demolish then.

But interesting to know. I've not seen that deep a lot in any area close to downtown in Fredericton.

[ArticSteve]

It seems in Ontario, land tax assessments put little, if at all, penalty, on depth.  Lot of towns, planned in the mid 1800s in southern Ontario, have really deep lots.  Probably 250 feet on average.

Well it makes for easy road widening if the necessity arises.. no need to demolish then.

But interesting to know. I've not seen that deep a lot in any area close to downtown in Fredericton.

Well it makes for easy road widening if the necessity arises.. no need to demolish then.

Well the lots may be deep, but the houses are almost always close to the roadway.  Not much need for road widening.


But interesting to know. I've not seen that deep a lot in any area close to downtown in Fredericton.


Lots in the Toronto core are tiny.  This is a function of history regarding the nation's city cores of eastern Canada.  But expand into the agricultural areas where land was  plentiful with an agricultural influence and lots grew.

[rrocket]

  But expand into the agricultural areas where land was  plentiful with an agricultural influence and lots grew.

There's a by-law where my dads house was...all lots had to be 120 feet wide.

[blotter]

far more affordable living down here, that's for sure.

Yup, but no jobs, no bakery, no good restaurants.

Did you see my question about when the banks would lower the payments for people who have variable rates.  Like i saw your post, about how it was lowered.  But when will I see the difference...

sorry, i missed the lower payment part. 
it should be effective immediately.  So if someone's rate got dropped January 28th
the next payment is calculated with the new interest rate.   However, I beleive some can setup a fixed payment.  This means if rates go down, the payment remains but principal portion increases.   If rates go up, payment remains but interest portion increases.   But most are setup to fluctuate.

[blotter]

This is not going to end well.   

Guess I should sell all my stock,  Buy another house, with these super low rates.  And rent it out to people that don't qualify for a mortgage.  That way when I get laid off due to the country going bankrupt, I still have income coming in.

ya but if THEY get laid off, you're stuck with 2 mortgages to pay for.

---------------

anyways...... JUST got an e-mail....  all our MTG rates are moving down tomorrow.
the flip side, is all our GIC rates are dropping as well.   We had a crazy special that was supposed to be good until March 2nd and they're pulling the plug.

Always possible.  But in Burlington, finding a freehold townhouse with 2 parking spots and a garage for under $400k, is next to impossible.  They sell within a week, without realtors...

I can't even imagine! 
we got our place for $170K - 6 years later it looks like we could get around $190K
should be mortgage free by 50 yrs old

170K will get you a run of the mill 40ftx110 lot in KW 

I bet.

in fairness, we're in potentially one of the worse towns in Niagara, which keeps the prices low.
But we've got a huge city lot, brick 50s house, 1040 sq. ft. which tiny attached garage and maybe one of the best neighbourhoods in town. 

Looking at MLS today and it would cost us between $200 to $250K to find something similar.

[Solstice2006]

far more affordable living down here, that's for sure.

Yup, but no jobs, no bakery, no good restaurants.

Did you see my question about when the banks would lower the payments for people who have variable rates.  Like i saw your post, about how it was lowered.  But when will I see the difference...

sorry, i missed the lower payment part. 
it should be effective immediately.  So if someone's rate got dropped January 28th
the next payment is calculated with the new interest rate.   However, I beleive some can setup a fixed payment.  This means if rates go down, the payment remains but principal portion increases.   If rates go up, payment remains but interest portion increases.   But most are setup to fluctuate.

I didn't know about that.  Maybe I will look into it further upon renewal...

[wing]

I've always had fixed payments.  I fixed them to the equivalent 5 year fixed rate at the time I took the variable.

[Solstice2006]

I've always had fixed payments.  I fixed them to the equivalent 5 year fixed rate at the time I took the variable.

well it's not like the rates have really changed over the last 4 years, so I don't really notice.  But next time (next 5 years), I have a feeling they will fluctuate more...

[wing]

I went from 5.89% fixed in 2005 to a 3.5% Variable, I paid about $7000 in penalties to do this.

Promptly prime started to drop and drop and drop, it took me 6 months to break even on that penalty.  Been laughing ever since. 

Everyone said to lock in a few month ago too, who's laughing now?  Me again

[aquadorhj]

I went from 5.89% fixed in 2005 to a 3.5% Variable, I paid about $7000 in penalties to do this.

Promptly prime started to drop and drop and drop, it took me 6 months to break even on that penalty.  Been laughing ever since. 

Everyone said to lock in a few month ago too, who's laughing now?  Me again

who woulda thought that central bank would lower the prime BELOW 1%!!! ..  i never would have thought that coming.

[Solstice2006]

I went from 5.89% fixed in 2005 to a 3.5% Variable, I paid about $7000 in penalties to do this.

Promptly prime started to drop and drop and drop, it took me 6 months to break even on that penalty.  Been laughing ever since. 

Everyone said to lock in a few month ago too, who's laughing now?  Me again

I have been lucky, this is my second mortgage, both we did variable.  IIRC, the rates never increased.  First one was 2008, this one was 2010.

[OliverD]

I went from 5.89% fixed in 2005 to a 3.5% Variable, I paid about $7000 in penalties to do this.

Promptly prime started to drop and drop and drop, it took me 6 months to break even on that penalty.  Been laughing ever since. 

Everyone said to lock in a few month ago too, who's laughing now?  Me again

who woulda thought that central bank would lower the prime BELOW 1%!!! ..  i never would have thought that coming.

Well it's not unprecedented. 

[Snowman]

Snowman and I were arguing about variable vs fixed 5 years ago. He was saying lock-in lock-in and I said no way rates are going to go up - they can't. There would be blood in the streets.

I was right 


Things are going to be the same for the next 5 years as well.

Yes you were  glad I still have my prime minus 0.75% mortgage. Now the question is, do I lock in one before August?

[Solstice2006]

Snowman and I were arguing about variable vs fixed 5 years ago. He was saying lock-in lock-in and I said no way rates are going to go up - they can't. There would be blood in the streets.

I was right 


Things are going to be the same for the next 5 years as well.

Yes you were  glad I still have my prime minus 0.75% mortgage. Now the question is, do I lock in one before August?

I was thinking the same, as mine is due in August as well.  I have decided not to.  I suspect things will be the same till then, or lower.  But not increase.  Will re-evaluate when June comes...

[blotter]

if you're in for the long haul....

get ready to look at 10 year specials.   or the 5 year. 
we might see another rate drop BUT... nobody has a crystal ball to do this.

5 year (and 10 year) rates are going to hit rock bottom this spring, again. 
at these ultra low rates, I don't see why not lock in.   It does give some protection to rates going up.

While I'm pretty sure we won't see rates go up anything soon... could be 2017... they will eventually go up.
It all depends... some want the "just in case" security of locking up. 

[Snowman]

We are in year 7 of the 10 lost years IMO we have another 2-3 years of low interest rates.

[blotter]

We are in year 7 of the 10 lost years IMO we have another 2-3 years of low interest rates.

I agree.  "low rates" for another 2-3 years.   But I do think we could see small increases starting early 2017 and that will impact mortgage rates right away.  it'll be small bumps.  So even if you lock in this spring at 5 years, you can see no rate change for even the first 3, while see rates bump up .25% for the last two.   

but nobody really knows.

[wing]

Don't lock in.  Variable wins over time.  You lock in for security not to save money.

The banks hedge the rates for the fixed ones.  They aren't in the losing money game.
Rates would have to climb high and fast to lose

[Snowman]

Probably a good idea just to keep riding this low interest wave longer then. Last time so....

[blotter]

thread inspired me to run some numbers as a decent "food for thought"

here's the fine print and assumptions:

$300,000 Mortgage
5 year variable rate vs 5 year fixed
amortized over 25 years.

I used our rates, which haven't moved much - so I'll admit they're not currently competitive.
(that's being reviewed though) 

for accurate calculations I figured out balances after each year of the 5.

I'm assuming the follow impact on the variable rates
January 2016 BoC brings the rate back to 1% = variable going from 2.65% to 2.75% (that's the move we've done so far)

January 2018 BoC brings prime up .25% = variable jumps to 3%

January 2020 BoC brings prime up .25% = variable jumps to 3.25%

Even with two quarter point raises (prime 1.25%) in that 5 year term...
the savings on the variable equal = $1,120


**** I hammered through the numbers... should be good but since I worked it out quickly there is always potential of an error   


noticed an error.... fixed....