Comments on: Canadian Interest Rate Forecast http://www.thefinancialblogger.com/canadian-interest-rate-forecast/ This is where your finance takes place Thu, 09 Feb 2012 04:02:52 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: The Financial Blogger http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-14779 The Financial Blogger Wed, 03 Nov 2010 16:54:41 +0000 http://www.thefinancialblogger.com/?p=2976#comment-14779 Hello Maria, 1st advice: don't listen to "everyone" as "everyone" were saying that interest would hike in 2009... and then they said the same thing 2010... and they will the say the same thing until they are right ;-) Will interest rate will go up, probably. When, I don't know. However, what I know is that prime rate has always been a better choice over any 5 years rate over a long period of time. People who took a 3.85% 5 years fixed back in 2008 have been paying much higher than those who went on a variable rate. I'm a big fan of variable rate but your budget must be able to take it. why don't you take the variable rate but make a higher payment? (at 4% for example). you will be able to pay down your mortgage faster and build a safety net if interest rate goes up. thoughts? Hello Maria,

1st advice: don’t listen to “everyone” as “everyone” were saying that interest would hike in 2009… and then they said the same thing 2010… and they will the say the same thing until they are right ;-)

Will interest rate will go up, probably. When, I don’t know.

However, what I know is that prime rate has always been a better choice over any 5 years rate over a long period of time. People who took a 3.85% 5 years fixed back in 2008 have been paying much higher than those who went on a variable rate.

I’m a big fan of variable rate but your budget must be able to take it.

why don’t you take the variable rate but make a higher payment? (at 4% for example). you will be able to pay down your mortgage faster and build a safety net if interest rate goes up.

thoughts?

]]> By: Maria http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-14532 Maria Tue, 02 Nov 2010 01:32:49 +0000 http://www.thefinancialblogger.com/?p=2976#comment-14532 Hi there, I am really confuse right now. I dont know which mortagage rate should I take. My bank is offering me prime minus 0.50 (prime 3.00%) and then the other offers are 1 year fixed 2.44% , 3 year fixed 3.70 and 5 years 3.89... I am really confused I dont know which one is better and everyone is saying that the rates are going up next year... I have to take 5 year closed but I dont know which one I should take. Please help me out with this Hi there,
I am really confuse right now. I dont know which mortagage rate should I take. My bank is offering me prime minus 0.50 (prime 3.00%) and then the other offers are 1 year fixed 2.44% , 3 year fixed 3.70 and 5 years 3.89… I am really confused I dont know which one is better and everyone is saying that the rates are going up next year… I have to take 5 year closed but I dont know which one I should take. Please help me out with this

]]> By: The Financial Blogger http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10858 The Financial Blogger Fri, 21 May 2010 11:33:32 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10858 This is actually what I suggest my clients! (To stick with the variable rate but to make bigger payment). This way, you benefit from a lower interest rate, pay down your mortgage faster and protect yourself against an interest rate increase. Cheers, This is actually what I suggest my clients! (To stick with the variable rate but to make bigger payment).
This way, you benefit from a lower interest rate, pay down your mortgage faster and protect yourself against an interest rate increase.
Cheers,

]]> By: Dave http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10857 Dave Fri, 21 May 2010 11:22:51 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10857 Thanks.... I'm leaning toward the variable too. I crunched the numbers and made some assumptions about rates --- the savings associated with the variable (especially after factoring in that at the lower interest rate, more of the payment goes toward principal) are quite significant. At this point, I'm probably going to just stick with the variable and have the bank base my payments on a 3.5% rate so I can fully maximize my payments until the rates catch up ... appreciate the advice. Thanks…. I’m leaning toward the variable too. I crunched the numbers and made some assumptions about rates — the savings associated with the variable (especially after factoring in that at the lower interest rate, more of the payment goes toward principal) are quite significant. At this point, I’m probably going to just stick with the variable and have the bank base my payments on a 3.5% rate so I can fully maximize my payments until the rates catch up … appreciate the advice.

]]> By: The Financial Blogger http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10856 The Financial Blogger Fri, 21 May 2010 10:57:51 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10856 @ Dave, Prime-0.60% is 1.65%. This is roughly 2% below your 5 years rate. We don't know what is going to happen in 18 months (who would have thought that Greece would shake the market like this 2 years ago?). I would go with the variable rate... but that's only my opinion ;-) @ Dave, Prime-0.60% is 1.65%. This is roughly 2% below your 5 years rate. We don’t know what is going to happen in 18 months (who would have thought that Greece would shake the market like this 2 years ago?).

I would go with the variable rate… but that’s only my opinion ;-)

]]> By: Dave http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10855 Dave Fri, 21 May 2010 10:47:56 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10855 I'm also struggling with whether to accept a prime -0.60% rate or a fixed rate which I've had held for about 60 days at 3.5% for 5 years. From all the predictions out there, the variable rate is probably better for the next 18 months. After that, the 3.5% is likely a better bet. Any advice? I’m also struggling with whether to accept a prime -0.60% rate or a fixed rate which I’ve had held for about 60 days at 3.5% for 5 years. From all the predictions out there, the variable rate is probably better for the next 18 months. After that, the 3.5% is likely a better bet. Any advice?

]]> By: Financial Ramblings: Crazy week « Intelligent Speculator http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10651 Financial Ramblings: Crazy week « Intelligent Speculator Mon, 10 May 2010 06:48:58 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10651 [...] climb higher @ MarketTradingtoGo -Buffet’s bet against hedge funds @ CanadianCapitalist -Canadian interest rate forecasts @ TheFinancialBlogger -Fixed annuities: Pros and cons @ Moolanomy -Asset allocation: Know your [...] [...] climb higher @ MarketTradingtoGo -Buffet’s bet against hedge funds @ CanadianCapitalist -Canadian interest rate forecasts @ TheFinancialBlogger -Fixed annuities: Pros and cons @ Moolanomy -Asset allocation: Know your [...]

]]> By: The Financial Blogger http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10375 The Financial Blogger Thu, 06 May 2010 09:33:01 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10375 @ Sean, if you can get Prime - 0.50% right now, I can tell you that you are making a hell of a deal (and I work in a bank ;-) ). This is a very low rate, I don't think you'll be able to get under this right now... congrats! @ Financial Cents, be careful about "it has to be".... in Japan, they have near 0 interest rate for the past 15 years (if it's not 20!). I don't think it's going to happen, but you never know ;-) @ Sean, if you can get Prime – 0.50% right now, I can tell you that you are making a hell of a deal (and I work in a bank ;-) ). This is a very low rate, I don’t think you’ll be able to get under this right now… congrats!

@ Financial Cents,
be careful about “it has to be”…. in Japan, they have near 0 interest rate for the past 15 years (if it’s not 20!). I don’t think it’s going to happen, but you never know ;-)

]]> By: Financial Cents http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10329 Financial Cents Wed, 05 May 2010 23:30:40 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10329 Good post Mike. I too, believe mortgage rates are on the rise, and the days of 3% borrowing costs over 5 years are coming to an end - likely never to be seen in our lifetime. Recall we're already at 40+ year historical lows... Those people who are actively paying down their mortgages are going to be rewarded big-time in another 5,10 or even 15 years. I subscribe to the theory that "normal" borrowing rates will return to about 6 or 7%. Exactly how fast it hits that mark, I don't know, but it HAS TO BE coming. Overwise, the Canadian household debt load is going to reach dire levels from which there is no, pardon the pun, return. Good post Mike. I too, believe mortgage rates are on the rise, and the days of 3% borrowing costs over 5 years are coming to an end – likely never to be seen in our lifetime. Recall we’re already at 40+ year historical lows…

Those people who are actively paying down their mortgages are going to be rewarded big-time in another 5,10 or even 15 years. I subscribe to the theory that “normal” borrowing rates will return to about 6 or 7%. Exactly how fast it hits that mark, I don’t know, but it HAS TO BE coming. Overwise, the Canadian household debt load is going to reach dire levels from which there is no, pardon the pun, return.

]]> By: Sean http://www.thefinancialblogger.com/canadian-interest-rate-forecast/comment-page-1/#comment-10308 Sean Wed, 05 May 2010 20:00:02 +0000 http://www.thefinancialblogger.com/?p=2976#comment-10308 I'm in the process of negotiating a variable rate. When I started talking to the bank (we're building a house), the best they would offer is Prime. Our current house is at prime minus one. So, over time, I have gotten them to prime minus .15, then minus .4. Now I think I'm about to get to minus 0.5. I'm wondering, how are other people doing in these negotiations... I’m in the process of negotiating a variable rate. When I started talking to the bank (we’re building a house), the best they would offer is Prime. Our current house is at prime minus one. So, over time, I have gotten them to prime minus .15, then minus .4. Now I think I’m about to get to minus 0.5. I’m wondering, how are other people doing in these negotiations…

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