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Land Pimps: Lock in fixed or stay variable? NTSFW

April 23, 2015, 10:50 a.m.
Posts: 13953
Joined: Feb. 19, 2003

When I have extra funds, I pay down the mortgaqe first. Then I'm happy to borrow on the HELOC to purchase investments (assuming the return is higher than the borrowing interest).

April 23, 2015, 11:25 a.m.
Posts: 2368
Joined: Dec. 31, 1969

Got'er done this AM at BMO. Thank you all for your input on this. I don't think Canada's all-in economic bet on high-cost oil (as the Saudis over-supply to protect their market share) is going to pay off any time soon, and ultimately I don't see rates/inflation going up here, even if US economy picks up. 5yr VAR.

April 23, 2015, 11:42 a.m.
Posts: 568
Joined: Nov. 23, 2002

Got'er done this AM at BMO. Thank you all for your input on this. I don't think Canada's all-in economic bet on high-cost oil (as the Saudis over-supply to protect their market share) is going to pay off any time soon, and ultimately I don't see rates/inflation going up here, even if US economy picks up. 5yr VAR.

what did you get for your variable rate, ie prime minus how much?

I'm not a human in real life, I just play one on the internet. 

April 23, 2015, 12:06 p.m.
Posts: 4759
Joined: July 9, 2004

So who's in the - It's cheap, so let's pay It off quickly camp, vs it's cheap, let's max It out and take 25 years camp?

We've alway been the former, no matter what the rate.

(It capitalized for Nat)

I like the idea of paying off faster no matter the rate. That said, at current rates I'm doing better on investments.

At present my plan is continue sock away cash and have a healthy safety net in case I'm off work for a while during this rocky time in my industry. I would rather pay down the mortgage but having enough to live off for 6 months to a year at present takes away any stress of being without work for a while.

April 23, 2015, 12:21 p.m.
Posts: 2368
Joined: Dec. 31, 1969

what did you get for your variable rate, ie prime minus how much?

prime -7

April 23, 2015, 12:35 p.m.
Posts: 568
Joined: Nov. 23, 2002

prime -7

nice work

I'm not a human in real life, I just play one on the internet. 

April 23, 2015, 4 p.m.
Posts: 33421
Joined: Nov. 19, 2002

So who's in the - It's cheap, so let's pay It off quickly camp, vs it's cheap, let's max It out and take 25 years camp?

We've alway been the former, no matter what the rate.

Don't borrow and pay cash camp.

It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.
- Josiah Stamp

Every time I see an adult on a bicycle, I no longer despair for the future of the human race.
- H.G. Wells

April 23, 2015, 4:33 p.m.
Posts: 3
Joined: July 4, 2003

I suppose its all circumstantial, but its hard not to prioritize paying off mortgage debt.

Technically you can get a greater return investing your money, but being mortgage free is easily the biggest way to reduce your monthly cash burn, therefore ensuring you need less cash-flow to be financially independent.

Regardless the cost of borrowing, I'm prioritizing;
TFSA
Mortgage debt.

Sooner I am mortgage free, sooner all the money that would have gone to mortgage payments can get reinvested into investments/revenue streams.

April 23, 2015, 4:41 p.m.
Posts: 750
Joined: June 2, 2003

use free cash, and equity if you want, to invest. money earning even just 6% is better than paying off debt at 2.5%.

Exactly. If you have a bunch of cash laying around why would you use it to pay down a 3% debt when the same money could be making you more than that invested somewhere else.

"Dont be fooled Timmy, if the cow had a chance he'd kill you and everyone you love."

April 23, 2015, 4:48 p.m.
Posts: 750
Joined: June 2, 2003

Technically you can get a greater return investing your money, but being mortgage free is easily the biggest way to reduce your monthly cash burn, therefore ensuring you need less cash-flow to be financially independent.

But using your money to make more money should mean you can pay your mortgage off sooner than if you just put the money down on the mortgage… if that makes any sense :lol:

"Dont be fooled Timmy, if the cow had a chance he'd kill you and everyone you love."

April 23, 2015, 6:58 p.m.
Posts: 16332
Joined: Nov. 20, 2002

So … what does the collective mind think about a 2 year fixed at 2.20%? That's pretty much the same as prime -0.7.

When one person suffers from a delusion, it is called insanity.

When many people suffer from a delusion, it is called religion.

April 23, 2015, 7:16 p.m.
Posts: 14582
Joined: Nov. 20, 2002

I don't see any advantage ^^ locking in when I can get that rate on a 5 yr variable?

My payments went down recently on the 5 yr variable, not lots but they went down … shit could go down

April 23, 2015, 8:22 p.m.
Posts: 4759
Joined: July 9, 2004

So … what does the collective mind think about a 2 year fixed at 2.20%? That's pretty much the same as prime -0.7.

I'm loosely contemplating a sale and move and doing my homework on numbers now. Bank is saying locked in at 2.19 for two years which I choked when he said that. I'm at prime less .75 now which is only slightly less than the locked rate.

I'm a big fan of variables but at today's rates we are talking very close deltas and the benefit of floating is getting smaller in the immediate future at least. That said with locked in rates that low it says to me the banks are seeing this as a long run.

April 23, 2015, 8:23 p.m.
Posts: 4759
Joined: July 9, 2004

I don't see any advantage ^^ locking in when I can get that rate on a 5 yr variable?

My payments went down recently on the 5 yr variable, not lots but they went down … shit could go down

Ya things could go lower but can't go much lower, this is getting super low.

April 23, 2015, 8:37 p.m.
Posts: 14582
Joined: Nov. 20, 2002

ya but lets say you are locked in at 2.20 and after the 2 years rates have shot up to 5% so thats where you renew and you only got 2 yrs of the low rates

but if you stayed loose and locked for 5 when rates started up maybe you get 5 yrs of the low rates and who knows what rates would be like later on?

I have held mortgages in times of 18% interest rates but I never had to pay those rates because I missed the peaks cuz I always took the 5 yr locked in

having said that the 5yr variable looks good to me now

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