https://financialpost.com/news/econo...rest-rate-hike

Welp. 1% increase in interest. Those of us on variables (me) are gonna lose out on our current terms. I'm headed to 3.45% now.

Still got a long way to go. Markets still pricing in at least 1% more in increase by year-end.

God what a mistake I made going variable for the first time when I could have locked in at 2.X..

Wooooooo the balls of BOC, recession here we come :pokerface:

Yup. That said I've always played the variable game and have won year after year since I became a homeowner in 2006. Eventually I'd lose in a few years, just not awesome that it's right around when I'm at peak debt load.

This hurts. Did not expect a 1% hike

Wow, I think everyone expected rate hikes (well, smart ones anyways), just not 225 points in less than 6 months...

We will curb inflation by making millions of new homeowners too poor to buy food. Very good.

The kicker is, in the grand scheme of things, your current rate is still low in historical terms.

Brace for more pain.

Yes, definitely unexpected news this morning. Fortunately, our daycare expenses are ending for good this month. Wife also got a raise this month. Time to shuffle some money around.

On another note, Stats Canada has released some income data from the 2021 census. Very interesting stuff if you want to see how you're doing relative to your peers. For example, the median household income in Coquitlam for households with kids is $134K. Within Metro Vancouver, there are almost 70K people between the ages of 35 and 44 who made over 100K in 2020.

Household income by type and location:
https://www150.statcan.gc.ca/t1/tbl1...ers%5B1%5D=2.1

Income by age and gender:
https://www150.statcan.gc.ca/t1/tbl1...ers%5B2%5D=3.1

Yeah same here, my kid starts kindergarden in September. One less expense, although a good chunk will now just go into the bank's profits...

Compared to the beginning of the year before the rate hikes started, my mortgage payments have gone up by ~10% before this most recent rate hike. With this most recent rate hike, I think that'll bring my mortgage payments up to 18 - 19% higher than before the rate hikes started...?
:pokerface:

I think we both renewed around the same time, both from previous fixed to variable

Il check back in 5 years if this was a good/bad decision :drunk:

Will we finally see Vancouver prices drop? lol

Probably see a little dip, some panic sales and then business as usual. Prices are not dropping, but sales transactions are. We will see after the summer rush and see what fall brings us

My monthly payment has been up $370 before today's announcement. :yuno:

do you mean the interest portion? My monthly payments remain the same with the rate hikes, but the portion going to interest increases while the principle amount decreases.

^ There's different types of variable mortages.

Some just increase the term like yours... others the payments go up to compensate and keep the term the same.

For those who have hit the trigger rate or close to it, how are the banks handling it?

1. Reset to cover interest only?
2. Reset to cover interest and original principal?
3. Make up for lump sum interest difference over the mortgage term?
4. Some combination of the above?

Did the bank give a new trigger rate?

This is not what we want and this isn't the soft landing everyone is claiming will happen. You want a steady price decline but I guess locals will find out what it means when the bubble bursts and we have a dramatic drop in prices.

We will see what happens, I remember a few years ago in this very thread people said Vancouver is different and prices will never drop significantly because there's too many people with money in the bank waiting to buy if prices drop...rich people from China... no more land to build... surf and ski in the same day...

I also remember reading interest rates will never go too high because it would screw over too many people lol

Even if it goes up another percentage point, as people are predicting, that is not considered "too high"

In 2021, there were just over 14,000 detached sales within the territory of the Greater Vancouver Real Estate Board (from Poco to Vancouver/Richmond).

In 2020, there were nearly 70K people in the 35-44 age bracket in the Vancouver Census Metropolitan Area (Vancouver to Maple Ridge/Township of Langley) that had declared personal incomes of 100K or more. In the 45-54 age bracket, there were another 72K people with personal incomes of 100K or more. From 2015 to 2020, the number of 100K income individuals in the former bracket increased by over 33%, while in the latter, the increase was 16%.

So, 70K households in Greater Vancouver have realistic access to a market of 14K detached homes each year. The stock of detached homes in the Greater Vancouver Real Estate Board territory is decreasing every year as detached lots are assembled and rezoned for attached property types. The number of high income earners continues to increase in this region in absolute terms, while the number of detached homes continues to decrease long-term. Despite the short-term turbulence with lending costs, it's hard to not be bullish about land values in this part of the world.

And then there's this:

https://twitter.com/jnordvig/status/...dWGFGHmXISokxA

https://twitter.com/Bjnordvig/status...dWGFGHmXISokxA

TLDR: The US market is expecting rates to peak in Jan 2023 and a 85bps rate cut in 2023.

I don't know about the trigger rates, but what I think is since you are on variable, you have technically fallen behind on your mortgage as you paid more in interest and less in principal. So when you hit trigger, you've fallen too far behind. So what I think will happen is you either have to put a lump sum in to bring your amortization back on track or increase your payment to get back on track on amortization.