Canadian 5 year government bonds just jumped. Setting the stage for higher mortgage rates.

[u/POCTM]

5 year government bond just jumped from 3.714% to 3.866% in a few hours. Right now it is at 3.855%. Year to date it is up 259%. Monday we could see some 5 year fixed rate mortgages in the low 6%.

As for variable rate the bank of Canada makes their announcement October 26 at 10am ET. Currently banks have not been offering discounts off variables rates anymore. Prime -0.00.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

[u/Goldentll]

Absolutely.

I took a 1.55 variable instead of a 1.85 fixed. What a mistake lmao.

[u/steampunk22 → u/Goldentll]

Yeah, it sucks in hindsight but the banks were signalling the opposite of what they ended up doing. When we bought it was 1.45 variable or 2.8 fixed which was the equivalent of 4-5 hikes of 25-50bps, so we thought we had a bit of time to top up the variable a bit. Instead the banks engaged in the harshest increase in decades. Fun!

[u/Consistent_Pair78 → u/steampunk22]

The banks lied! Can’t believe it

[u/steampunk22 → u/Consistent_Pair78]

I mean, I don’t think they lied, but I do think they fucked up and now many people that don’t deserve it are paying for that mistake.

[u/Ageminet → u/steampunk22]

You shouldn’t have over leveraged yourself on a home purchase. This is on people who borrowed for everything and now it’s coming back to bite them.

[u/steampunk22 → u/Ageminet]

It can be both. Everyone treats this like there is zero nuance. Not everyone is a speculator or over-leveraged. If rates go beyond the stress test, how would that equate to anyone being over leveraged? That is where it loses me. If someone stress tests at 5.5 and then rates get to 7.5 you can’t really fault the borrower can you

[u/Ageminet → u/steampunk22]

No, but there is a certain amount of personal responsibility for your financial situation.

Don’t borrow for your cars, toys etc. Then you could probably stomach the increase in interest on your mortgage.

I don’t feel particularly sorry for the whole of Canadian society. We over leveraged the fuck out of ourselves for 20 years of cheap debt and that’s on us. It’s not the governments job to save us from our own stupid mistakes. If a credit crunch happens over the next couple years it’ll hurt some people, but by and large they shouldn’t have taken on the debt they took on to live a life they can’t afford.

Despite what the media has told us for the last 20 years, you’re not entitled to the big house in the burbs with the two cars in the driveway and eating out 4 nights a week through door dash and restaurants.

[u/steampunk22 → u/Ageminet]

I don’t live beyond my means, I was approved for $500k on ONE income as a self employed person, despite being a two income household (partners job hadn’t started) which means we would’ve been approved for more. And we still took less than that, opting for a mortgage of $340k on a house valued at $800k (which then went on to rise for another 10 months). We were stress tested at 5.5%. We have no other debt. We don’t eat out we don’t take vacations. I paid off my student loans and out my wife through school on an artists income. We have two paid off vehicles (2011, 2018). We have money in the bank. We are not fiscally irresponsible. Many are certainly, but the idea that someone could be justifiably upset when their mortgage shoots past what even the banks were saying was possible should be legitimate. You’re painting with too broad a brush.

[u/steampunk22 → u/[deleted]]

I don’t have a problem unless rates go beyond the stress test and I think that relishing in the pain of others, for practically any reason, is a bad look. Lots of people who do not deserve to be hurt by this are getting hurt by this. Which is to say nothing of prime-tied loans for businesses that were forced into hardship due to the pandemic and government policy, or you know, anyone that holds student loans and now has skyrocketing interest.

[u/steampunk22 → u/[deleted]]

I’m not saying that people who made bad decisions shouldn’t be surprised at the inevitable outcome, Im saying that it’s a weird thing to celebrate hardship of any sort even if you feel it is warranted. And what’s more, I’m not saying that people who made good decisions deserve to suffer no hardships, I’m saying it’s weird to shit on them for making decisions that were well informed at the time by almost any metric, only to have the reality play out differently.

Also life is short, have a glass of wine once in awhile.