I don't disagree with safety and the all cities should be putting more lights at crosswalks but it is nice to be able to look up and see the stars at night... You can't do that anymore in many areas in Vancouver. There's way too much light pollution.

I have been on fixed with my first property since 2015. Renewed in 2020 for 4 years fixed and ended up selling in 2021. Didn’t port the mortgage and got hit with a $20k penalty. Not going fixed again unless there are good reasons to do so.

Now I’m on variable. What I didn’t realize is that my payment is fixed. Rate hikes mean the amortization simply stretches out. While this is to my advantage with cash flow, it kind of BS because no one would feel the effect of variable payments.

Why would people care if their amortization is 50 years if rates go up by another 2%? They will be ok as long as prices don’t crash and go negative equity. There must be a trigger to reset payments and that’s when a ton of people can’t afford to keep their homes because their mortgage jumps from $3k to $5k.

-looks like many commercial and residential construction projects are being delayed now because of a strike happening among some concrete truck drivers.

Vancouver Sun

Strike by concrete truck operators stalling construction throughout Metro Vancouver
by: Joanne Lee-Young

A weeks-old strike by concrete truck operators has stalled residential and commercial projects across Metro Vancouver, leaving builders and customers worried about the cost of delays.

"I've had my order delayed by two weeks. It's been a nightmare," said Marie-Claire Howard, chair of Alliance Francaise Vancouver, a non-profit organization, which is building a four-storey, 28,700-square-foot new cultural centre on Cambie Street near 47th Avenue.

The current stoppage is compounding an already precarious situation for the project after years of grinding to get approvals from the city and then months of bad weather, said Howard.

"All we want is for the job to be done. The project is already super late for other reasons, so this is adding insult to injury and we are at risk of going bankrupt. We haven't had numbers or requests yet, but the trades are signalling that if this continues, they could ask for compensation and more money."

The strike by concrete truck drivers at Rempel Bros. Concrete operations started on May 20, according to Jeff Sieg, director of corporate communications at Lehigh Hanson, Inc., which owns Rempel Bros. and is based in Irving, Texas.

Rempel Bros. was started by three brothers in Abbotsford in 1967 and now operates a fleet of about 75 ready-mix concrete trucks.

A stalled construction site due to the concrete workers strike at the location of the new site of the French cultural centre near Oakridge in Vancouver on June 7, 2022.

It has a dozen locations in Metro Vancouver and the Fraser Valley and has supplied concrete for large infrastructure and major building projects such as the Golden Ears Bridge, Richmond Olympic Oval, as well as the new student union building at the University of B.C., plus large shopping centres.

In total 160 Rempel employees are on strike, but an additional 110 Ocean Concrete and 24 Allied Concrete employees are also not crossing picket lines, according to Barry Capozzi, business agent for Teamsters Local Union No. 213, one of two unions involved in discussions.

He estimates the three companies supply about 35 per cent of the concrete supply in Metro Vancouver and the Fraser Valley.

Smaller concrete suppliers say their phones have been ringing off the hook.

"It's just put a real supply chain squeeze on for all the developers and builders. There's not enough time in the day, not enough concrete trucks to ship it all. We're trying to ship as much as we can and it's not even coming close to what the demand is," said Rick Rodland, customer manager at Coquitlam Concrete, which is a smaller and independent concrete supplier.

Sieg said the company and the union have been unable to reach an agreement and they are scheduled to meet again on Wednesday. Capozzi said one of the main sticking issues has been working conditions.

In the meantime, one homebuilder says he's not sure how to make plans.

"Smaller suppliers already have their regular clients," said Sean Ederer at Sea-Pat Construction in North Vancouver, which has been doing home projects for over 30 years.

"Anybody like me who calls and wants 10 yards of concrete or something for a main house slab, they're saying, 'We'll book you, but it's a month down the road.' What do I tell my client?"

jlee-young@postmedia.com

I think having a "fixed" variable payment does expose you to higher "underwater" or negative equity risk, as you say.

Also, even if prices don't crash but let's just say stay stable and near ~0% growth by the time you renew, your new "fixed" mortgage payments are probably going to jump bigtime with the new interest rates which will then cause more downward pressure of RE pricing because then there will be more people who need to sell and get out of their mortgages if they can no longer afford it

I never realized until literally a few weeks ago that variable meant fixed payments as well. Me being a noob when we bought 4 years ago went straight to fixed for the reason of knowing exactly how much I was paying. Oh well my fault I guess but I'll consider variable next time.

Most variable mortgages have a trigger rate where the payments get recalculated. My variable rate was 1.1% when I refinanced it earlier this year, it's at 2.35% now after the hikes and my trigger rate is 3.15% or 3.35% iirc. If the rumours are true that we will see another 1% ramp up by the end of the year I will see my payments forcefully jump because I would have hit the trigger rate. Lots of ppl don't know this and will be in for a world of hurt. I don't know if BoC would risk tanking the RE market and the economy though for that. We have less than 1% of rate runway left before it really hurts everyone.

The other thing is variable rates still have a term. Mine is 5 years and I think most ppl did 5 years as well. When the term is up, whatever extra interest you accrued or principle you didn't pay down will come back to haunt you and your payments will jump significantly when you renew.

The road right now is either BoC raise rates to hit trigger this year and shock the economy, or the economy takes a shock when everyone's terms are up in 3-5 years.

What’s the best course of action to make sure you don’t get fucked? Will lump sum payments have the same effect as upping your payments for the most part? We’ve paid way down on our mortgage and I’d rather continue the progress over having a lower payment.

Ours currently is set to change the payment to keep the amortization the same, on variable.

Not sure if that’s the best strategy but that’s what we’ve been doing since we renewed

Depends on your income but you can always refinance mid term to stretch payments out to 30y or borrow more money. :pokerface:

Yes lump sum payments work.

If you can imagine when you go to re-finance, if the interest rate is higher, and you still made the minimum payments in your variable rate mortgage for the entire 3,4,5 year period. Then when the recalculation is done and the new rate is factored, your payments could jump substantially if your amortization period remains the same. You could also extend the amortization period (or atleast you used to be able to, not sure if by the new rules this is no longer allowed).

Needless to say when you go to renew your mortgage is where most people tend to get fucked on variables.

If you are making lump sum payments on your mortgage and staying ahead of the rate increases, then you wont have any issues.

As usual… what?

Just keep doing what you are doing and stay on top of it.

TD's easyweb gives an overview of your mortgage situation. My pay off term is now at 38yrs :QQ:
I need to lump sum next month. I would have done some earlier but I had car insurance, home insurance, and property tax all in the span of 2 months.

You can usually go back to your lender to refinance to extend your term, if you are really desperate to not lose your house due to higher payments or at the same time apply for more credit

For the guys interested in buying rentals, what are you thoughts on Reits? I think they took a bashing in the last few years and with housing costs/ rents rising they should be seeing better returns? Also a lot more diversified than throwing all your eggs on one tenant and much much more liquid. Plus you don't have to manage anything.

When it comes time to renew, most people should be okay as long as their incomes have not been impacted and they are okay with paying more interest and extending their debt burden (they might not have a choice). You can extend your amortization by re-qualify at whatever the stress test is at that time and signing a new mortgage. In theory, you can sign up for a 25-year mortgage with a 5-year term, then sign another 25-year mortgage in 5 years as long as your income supports this, and then another 25-year mortgage in another 5 years lol.

That's if there's enough equity to do that. Considering my pay off is 38 years, even if we refinanced at the end of term it's still going to suck.

That's what my variable rate mortgage is like as well -- my amourtization period stays the same, but my weekly payment amount changes depending on the going interest rate. After the 2 recent interest rake, my weekly payment amount went up by ~6%.

This sounds great. Until interest rates climb significantly, and prices start to fall. Then when they appraise your house and its worth less than your mortgage amount, and they cant renew or refinance you, and you cant pay the extra lump sum or complete the stress test.

Then you foreclose on your house and live in a cardboard box under the granville street bridge.

Its not just one thing that causes someone to foreclose on their house, its usually a cascade of multiple factors. Climbing interest rates and lower appraised values are the two most common factors to people not being able to renew or refinance.

I asked my broker about this, TD will always renew you even if the ratio becomes out of whack as long as you keep up with your payments. Terms and rates are another story though.

You literally are answering the complete opposite of the question I asked.

The way things are trending, if rates are 5 - 7% in 2025 by my renewal. I think there's a good chance I'll likely lump sum 80%, if not more of my equity profile into my mortgage.

Seems like I'll lose out on 1 - 3% of equity gains on average. But a renewal without pushing amortization back to 25 - 30 years is spooky. I don't wanna pay $2,350 - 2,700 on a $360K mortage, 20 year remaining.

This would be extremely rare, especially if you're still capable of servicing the mortgage.

Banks don't want to be holding and trying to sell underwater real estate, when they could still be receiving interest payments.

I know there's no crystal ball but if you had the choice to refinance now without any penalty or just wait to renew in just under 3 years (April 2025) what would you choose. I'm currently debating lol

I would refinance now, lending won't get easier with higher rates, stress test etc, plus you can use the extra equity to invest.

HSBC
They seem to be one of the more lenient lenders to my surprise.