2.42. :awwyeah:

I don't understand this. So you avoid CMHC insurance if you get to 20%, but you'll still have to pay interest on this loan in 5 years. You'll end up paying more one way or another.

Besides, no one is going to use this to "Get the 5% top up to 20% down"
They're going to use this to get a 5% down payment of an even more expensive house than they should be getting.

with the new mortgage rules i dont think the loan will be providing buyers any extra "buying power" as they will need to be pre-approved for a mortgage prior to getting this loan on the down payment as far as i understand.

Undoubtedly, the provincial down payment interest-free loan will benefit a certain number of people.

According to the economists, however, this does little to really make RE ownership affordable. The interest-free loan does nothing to increase supply. On the other hand, it increases demand because now a bunch of first time buyers have extra funding -- funding that they will have to repay in 5 years -- to buy. For anyone that has taken Econ 101, you'll know what happens to the market price.

The only persons that really benefits are the sellers. This include private home owners as well as real estate developers. Again, it does not help to make home ownership more affordable in the general sense. In fact, you can argue that all taxpayers are now footing this bill (on the un-collectable interest).

It is also inconsistent with the BC Libs implementation of the foreign ownership tax. But hey, I suppose I am expecting too much from the Libs if I want consistent policy implementation from them.

Pre-quals are always higher than what I would consider "actually affordable". Fuck, they pre-qual'd me at double what I actually bought my house for.

^ We bought a small house in Langford for $455 a little over 5 years ago. The bank was willing to give us $760k There is no way we could afford this. Maybe if we had no utilities, property tax or home insurance. lol

My five year fixed mortgages on three properties are:

2.652 - Coast Capital (blended rate)
2.64 - Coast Capital
2.79 - Island Savings (ugh)

It's not helping people with 0% down. You need to have at least 2.5%. You can't apply for the loan if you don't qualify for a mortgage of at least 5% under the latest CHMC rules.

People who are applying for insured mortgages are already required to be stress-tested at a rate of 4.64%. Considering you can get a 5-year fixed rate for around 2.5% from a major bank (and further discounts are available at monoline lenders), this provides some degree of protection for people who are going to over-leverage themselves. Interest rates are going to go up, but for rates to go up by 2% in 5 years is asking for a lot.

My first mortgage was 5.9%, the mortgages seem almost intrest free at this point.

Was talking to my grandma the other day about the houses they had lived in around the lower mainland

At one point they were at 18%

And another house the "down payment" was my grandpa framing their house as well as the neighbors himself lol, however that worked out

Completely avoiding CMHC fees on a interest free loan you don't understand? Sure you'll have to start paying that back after 5 years. But I'd rather pay back a loan, versus an insurance fee and a loan (the extra mortgage if you didn't get a 5% loan).

I think this whole setup is dumb, my idea isn't much better. If you can't save a penny don't buy a house. Unexpected expenses go along with that house too.

My favourite grandparent story is when my grandpa tried to purchase a business in town (on the island). They needed a credit check. He said sure. Realized they had no credit. The bank or whoever required the credit check asked "how come, how did you get your car?". Umm cash. "Your house?" I built it. "Sir you need a credit card". So grandma got a new stove at sears. She still talks about how nice that stove was. Lol. They were then approved.

I think my parents first mortage was like close to 18% as well back in the early 1900's. If we look back now that's crazy how much interest have gone down!

Even if interest rate is at say 8% now I think a lot of ppl who purchase a home now would not be able afford one.

Back then ppl were very responsibility with their financial. Even my parents to this day always use cash unless is a really big purchase. "Use what you have and don't overspend". Now ppl use credit card coz of all the reward points, cash back etc etc.... but they don't realize they might not have the actually money to pay it off. So is actually costing them more than the rewards points since the interest is so high. I have a co worker who does this all the time. Use a few credit card if she can't pay one of them off she should cash advance on one credit card, pay the other one off. Wait till she have money and try to pay the other credit off. I was like since you are always owning credit card debt why not just apply for a line of credit pay them all off. Then pay your line of credit coz the interest is a lot less.

She said is too much work to apply for one @@

^
I met one person last year at work who had like over $20k in credit card debt. Didn't realize it was that common to be in debt. I thought most people generally pay it off every month.

I hope she know a "cash advance" on your account or credit card. Usually has a much higher interest rate + it starts billing basically the day of.

Also, to pay off the cash advance. You'll need to pay off the full balance (ie. you owe a balance of $500, cash advance $200. Youll need to pay off the first $500 before they start paying off the $200 cash advance)

Not sure if that's for all banks/credit cards. Reason why I always told my clients. Never take out cash advances if possible.


Worked in one of the top 5 banks downtown. I can tell you. If you have zero debt. You're probably richer then 60% of the clients i've encountered..

More common than you think. More than half Canadians don't have more than 10k in savings or something like that. Americans are worse, 70% don't even have 1k in savings.

The entire world economies are built on credit. That's why they have to bailed out banks in 2007-2008 because the economy would crumble with banks not being able to give loans.

It is still not an argument for hoarding cash. Credit cards are fucking great, you just need to not be an idiot and pay the balance off every month and never ever use cash advances. I think my main card's cash advance rate is at 20-30% or something retarded while the regular interest rate is tiny.

Household debt is high and very common.

Slightly older articles but still relevant:

Sept.

Canadian key household debt ratio hits record high - Business - CBC News

Oct.

Canada?s record household debt is threatening its financial stability, global bankers fear | Financial Post

Nov.

Canadians' Household Debt Now Worth More Than Entire Economy

I am sure my banks and credit card company(I use my banks CC) hates me. Coz everytime I made a purchase with my credit card I login online and pay it off right away using my chequeing account. So sometimes you would see like $5 credit card fee follow by $5 payment to credit card account on my banking transaction. I am sure when my bank look at this they are pretty piss off lol.

... Wow..... You are not serious are you?
You do realize that credit card companies make money every time you use it from merchants? You are like saying that bc hydro hates people who pays off bills immediately because they can't collect interest charge from them.

LOL, they're not "pissed off". They will win both ways. As long as you use the method of payment, they'll be making money. Yes, they won't collect the 20+% interest from you, in fact might be paying you 1-2% cash back. However, merchant fees meaning the store that took your purchase will be forwarded to the CC company. These are usually 2-4%, depending on card type. Ever wonder where those points/cash back rewards come from? That, they give you a bit and pocket some themselves. Its a good business to be in.

Incoming are things like Apple Pay, Android Pay, Samsung Pay, etc. Wonder why they're all so aggressive in trying to be the next big thing? Because theres lots of money to be made being the middle man.

Bank generates revenue from merchant transaction fees. Interest rate they collect is nowhere near the fee they generates. As a banker, I would love my client to pay off my cards everytime so I don't have to end up with bad debt. You will notice bank will increase your credit limit if they see you have a history of paying off balances on time. Increase purchasing power = More spending = more transaction fees they collect.

^^ Guess is kinda of bad for Starbucks since I use my CC to even purchase a cup of coffee lol.

I guess that's why Wal-Mart stops taking Visa cards. Too much fees.

TIL Mr.HappySilp is ~100 years old :troll:

Credit cards are definitely not 2-4%. More like 1.5%. Visa and m/c is about the same, while Amex is almost double

In the end, it's percentage so I doubt Starbucks cares. Some companies charge a super low rate for credit cards but charge a small fee per transaction. Good for big ticketed items, shitty for small things

Actually, a lot of premium cards are in the 3-4% range. Those rewards, travel insurance policies, warranties, etc. aren't cheap.

For a lot of businesses, margins are quite thin - 4-5%. If some of the biggest retailers in the world, such as Walmart and Costco, are only willing to work with one credit card company, then it speaks to how much is at stake.

It's why a lot of family-run businesses refuse to accept credit cards - the fees are simply too high considering their razor thin margins.