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Spoiler! Following up on my previous post about why and how we need to tax speculation out of residential housing market, I came across an article that echoed my exact sentiment but with empirical data. https://www.nationalobserver.com/202...d-make-it-hurt From the article: According to recent data from Teranet, Ontario’s land registry operator, nearly 25 per cent of homes purchased in the province in the first eight months of 2021 were by people who already owned at least one other property. In Toronto, that figure was nearly 30 per cent — more than first-time homebuyers or people moving from one home into another. Over the last decade, the market share controlled by multiple property owners has increased by 50 per cent. We need to eliminate the potential for speculation out of the residential real estate market. This is by far the easiest and quickest solution that we have at our disposal currently. Whether its done through capital gains tax or property tax, if its done on the 2nd, 3rd, 4th property, it won't have a direct impact on regular homeowners. And for people with recreational properties, it shouldn't be hard for a policy to distinguish between a recreational property outside of GVA/GTA vs a second residential home within. |
His mortgage payment is at least $1250 before interest given 30k paid off over 2 years (24 months). Edit: if I were to guess his mortgage, around $2000 a month? @Gerbs, have you asked your mortgage lender regarding the heloc? They should have a rough idea on your heloc options; at the end of the day, the bank is in the business to make money by lending out money. |
O $600 a month housing cost isn't mortgage. It's housing cost estimate, so property tax, strata, electricity cable etc. I assumed there's no mortgage left, so fully paid out and rolled into the giant HELOC. Instead of keeping MTG and small HELOC |
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Scotia and some other banks kind of have this "all in one" account where, as you pay down your mortgage, that amount is now available to you in your HELOC automatically However, as Gerbs said above, the rate you get with the HELOC is worse than the mortgage rate obviously so upon renewal etc. its probably in your best interest to add to your mortgage as opposed to getting a bigger HELOC if you're actually going to use those funds |
You guys are talking about the revolving rate on a HELOC which is always high, as it's prime +%. But once you take out the money you have the option to lock it into a fixed portion = mini mortgage at pretty much mortgage rates. No one just keeps cash borrowed in revolving as it's a higher rate unless you plan to have lots of cash in a few months to pay it off. Though your monthly minimum payment would be lower as you're only required to pay interest every month. Even at 2.95% revolving rate is cheaper than Toyota finance rate :pokerface: :lawl: How else do people buy Tesla's and type r on here |
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I didn't read the article cause lazy :lol but do they categorize whether if 2 properties were held onto for some period of time before inclusion? Cause otherwise some one like me would have skewed that data, and in this red hot market probably very common as well. |
If anyone wants to speak to mortgage specialist at either TD or BMO lemme know. I have friends who are MS there. Rather than talking to some random account manager at a branch Quote:
It's a big line of credit. That's what I have. There's still 2 different rates for mortgage and the money that's taken out. But the rate difference are much closer than say conventional+heloc |
Yea I don’t use the Heloc but it’s there when I need it. Honestly I want things as simple as possible so when we redid our mortgage as a lower rate we were able to pay the same as we were before at the new interest rate while adding a bunch back into the mortgage. I’d rather just have that single auto withdrawal/mortgage rate to consider than paying towards both the heloc and mortgage every month. The less I have to do the better |
Yeah same here. I've had both and much rather this way as well |
By rolling your HELOC debt into your fixed mortgage when you refinance/renew, you are amortizing that debt over a longer term. The banks win both ways - either through higher interest on the HELOC side or through a longer amortization for that debt. |
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Here's another study released by Bank of Canada today: "A new study from the Bank of Canada released Thursday found investors accounted for nearly 20 per cent of home purchases dating back to 2014, a figure that has rapidly outpaced other types of buyers during the COVID-19 pandemic." https://www.bnnbloomberg.ca/investor...nada-1.1707216 We definitely need to address both sides of the supply/demand equation but building tens of thousands of properties will take years (assuming you can even solve the NIMBY issue) whereas we can remove 20% of unnecessary demand from speculative investors immediately. |
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One thing not mentioned is that not all HELOC's are built the same. Not all can be fixed into a fixed term with lower interest rates. |
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Looking at our housing crisis now, I think I agree with you. Only because sentiment has changed. Right now, I believe we're in a housing crisis. People need a place to live. If we want to solve this issue we need drastic changes. The problem is with people who own more than one property now, do you think we should grandfather them or still charge them? I don't think it's fair if we charge people that have multiple properties and we change the rule now. |
I think it’s pretty fair. How fucked can someone with multiple investment properties really be? Maybe to prevent collateral damage having a second property should be grandfathered in, but 3, 5, 10? These people have profited far too long off of a broken system and in 95% of cases generational wealth. If the taxes are too high, sell your place. That’s literally the point of measures like that. To force those decisions. |
A little bit shortsighted... for example... gentrification of slums in the USA are used to push black people out of their homes... an area that was formerly the "hood" where people had houses gets turned into hipsterville, gets gentrified, property taxes shoot up, black people can't afford it and they have to sell to developers and move to an even farther away slum. Obviously some granny on W.41st isn't living in a slum, but it's not exactly limited to them. For example, my dad worked with a fellow at Hewlett-Packard for 25 years so he had a decent job and whatnot, he worked hard and got a house in Vancouver somewhere between Oak and Cambie... and he just told my dad the other day he's selling his house because he can't afford the taxes anymore. Yah big whoop he's probably going to sell for $2.4M but to him he doesn't care about the money his property went up, he had made it his home and wanted to live there till he dies, but now he's gotta find a townhouse somewhere at 70 years old. |
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Just like taking out a high interest loan to buy a F10 535i :pokerface: Sent from my SM-G781W using Tapatalk |
I don’t think they have a choice but to be shortsighted. This is like 30 years of shortsightedness that got us here. Also, why doesn’t he defer his taxes? I just don’t get why young people just have to figure it out while the older generation expects it just to be a cruise without even making 1/10th the sacrifice. I don’t believe this guy should lose his home that he loves of course, but it sounds like there’s no attempt to make it work. That said, maybe he doesn’t know? Maybe someone should help lay down some options for him. |
I can't speak for his situation, but I'm fairly confident if there was a way for him he'd have taken it. Perhaps he made some poor financial decisions, I'm not too sure. Someone in that age group survived 20+% interest rates in the 1980's too. My dad grew up on a farm with shit education and managed to get a Masters in EE at UBC and started as a sales rep and learned to program when computers came out etc.... he didn't exactly coast through life. The only thing I can really say for him that was "easier" was that the house my parents currently live in cost $145,000....... which was like 5x his salary at the time. Nowadays a house in that neighbourhood is like 20x a decent salary or more... BUT... interest rates at the time he bought were just coming down from that 20% range... 1985... so prices were super depressed... not 2% like they've been for nearly 20 years now. |
Yeah I think I worded that wrong. Each generation has it’s difficulties. I really just meant ease of home ownership in comparison to jobs available. You could be a guy slogging it out on the production line and own a house by the time you are 25, while your wife stays home and takes care of the kids. Now you need to be the guy with 30 people working under you on that production line, you better hope your wife has a job that pays as much as yours does. Maybe by 35 you’ll have a 1 bedroom condo and have to make the decision if you can even have a kid since you’ll have a full extra mortgage payment a month for child care. Or one of you can quit your job and you can scrape by and maybe move out to merrit so you can afford a house, but can’t find a meaningful job in your field, so scratch that…. |
Houses might have been "cheap" in 1985, only being 5x income But my god, most other things sure weren't. I remember my parents telling me how insane the first mac was, like 3500$ or something Pretty sure produce and furniture was also way more expensive in comparison to today, not Ikea garbage that lasts 4 years Now all goods are imported from slave workers, everything is thrown out instead of repaired We have everything we need in 2022, with a click, and a fractional dent to the bank account. The only thing missing is real estate Pick your poison |
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