this post was submitted on 18 Oct 2023
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[–] [email protected] 10 points 2 years ago (3 children)

Just wait until all the people who got their mortgages at 1-2% start coming up for renewal at 6-7% next year.

[–] Showroom7561 6 points 2 years ago

That might be me. I just hope to all the gods that rates come down before renewal.

[–] apprehensively_human 6 points 2 years ago (1 children)

I signed on a 6.1% variable rate and I'm dreaming of the days when 2.5% was the norm

[–] [email protected] 0 points 2 years ago

Having signed up for 6.1%, you've presumably budgeted so that you can actually pay it going forward at that rate. The problem for people who signed up at around 2% is that they budgeted to pay at that rate. And since a lot of people have no savings, they can't afford a large rate increase now. So, when mortgage renewals start coming up, a lot of people are gonna end up being insolvent.

[–] [email protected] -1 points 2 years ago* (last edited 2 years ago) (2 children)

Why on earth would anyone sign an ARM when rates were lower than at any previous point in history?

[–] [email protected] 1 points 2 years ago (2 children)

even people who signed for a fixed rate are screwed when they have to renew though

[–] FunderPants 4 points 2 years ago* (last edited 2 years ago) (1 children)

You are screwed for sure if you shopped at the top of your approval range in one of the hotter high value markets or immediately ate up the rest of your GDS/TDS with truck/SUV loans, renovations or other expenses. However, There will be Canadians who are in a position to handle a rate increase from 2.3% to 6% or so, when their renewals come up.

[–] [email protected] -4 points 2 years ago (1 children)

The context here is that over half the population is 200 bucks away from not being able to make ends meet. So, clearly lots of people will not be able to handle large increases in mortgage payments. Meanwhile, those who do will be pushed further to the margins.

[–] [email protected] 2 points 2 years ago (1 children)

We don't have to renew in the USA. Someone else explained the way they work in Canada and yeesh! That's hella lame.

[–] [email protected] -5 points 2 years ago (1 children)

Yeah, I was talking with a friend in US about this and he was absolutely shocked that you have to renew the mortgage every 3 years of so in Canada.

[–] [email protected] 2 points 2 years ago (1 children)

I can't imagine having to completely re-adjust your budget every 3 years, despite making a 30 year commitment and shelling out most or all of your life savings.

[–] [email protected] -4 points 2 years ago

it's a completely nonsensical system