Comments on: My Smith Manoeuvre – March Update http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/ This is where your finance takes place Fri, 10 Oct 2008 22:46:11 +0000 http://wordpress.org/?v=abc By: The Financial Blogger http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2215 The Financial Blogger Mon, 07 Apr 2008 09:17:55 +0000 http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2215 I don't want to bust your chops but 3 years ago, but I think that Prime was around 3.75%, right? You always have to pay a premium for a fix rate, even thought you had a really good one. Negotiating a below prime HELOC is possible... if you are a millionaire ;-0 LOL! I don’t want to bust your chops but 3 years ago, but I think that Prime was around 3.75%, right? You always have to pay a premium for a fix rate, even thought you had a really good one.
Negotiating a below prime HELOC is possible… if you are a millionaire ;-0 LOL!

]]> By: Customers Revenge http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2213 Customers Revenge Mon, 07 Apr 2008 01:59:49 +0000 http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2213 My mortgage is 5 yr locked at 4.75 (2.5 yrs left). I think you should always be able to get a variable mortgage at prime minus, but HELOC are usually at prime in my experience. Let me know how to negotiate sub prime HELOC if you can. We locked it in at the time because we thought it was near bottom ... turns out it was. My mortgage is 5 yr locked at 4.75 (2.5 yrs left). I think you should always be able to get a variable mortgage at prime minus, but HELOC are usually at prime in my experience. Let me know how to negotiate sub prime HELOC if you can. We locked it in at the time because we thought it was near bottom … turns out it was.

]]> By: The Financial Blogger http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2201 The Financial Blogger Sat, 05 Apr 2008 10:25:40 +0000 http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2201 CR; This is a gross return (before tax and interest pay on my SM). Leverage techniques don't show their full potential in the first years as it is a long term strategy. I am obviously losing money this year but it is normal. I started my mortgage as line of credit based on the prime rate so I didn't have to convert it. If you can lock a mortgage tomorrow for less than 5.25% on the fix rate for five year, let me know about it ;-) Especially considering the fact that prime rate is expected to drop at least by another .25% by the end of the year. It is proven mathematically that going with the variable rate over 25 years is a much better option than getting a fix rate each 5 years. CR;

This is a gross return (before tax and interest pay on my SM). Leverage techniques don’t show their full potential in the first years as it is a long term strategy. I am obviously losing money this year but it is normal.

I started my mortgage as line of credit based on the prime rate so I didn’t have to convert it. If you can lock a mortgage tomorrow for less than 5.25% on the fix rate for five year, let me know about it ;-) Especially considering the fact that prime rate is expected to drop at least by another .25% by the end of the year.

It is proven mathematically that going with the variable rate over 25 years is a much better option than getting a fix rate each 5 years.

]]> By: Customers Revenge http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2190 Customers Revenge Fri, 04 Apr 2008 13:04:43 +0000 http://www.thefinancialblogger.com/my-smith-manoeuvre-%e2%80%93-march-update/#comment-2190 How do you calculate return on the Smith Manoeuvre (or are you using the return on the account as the return) Is it an after tax return? Would be interesting to compare your SM results from the results you would have without doing the SM. In essence, was it worth it? My own investigation a few years ago into converting my mortgage into investment loans resulted in a conclusion that "It wasn't worth it". The amount of money involved in remortgaging the house to cover my investments did not make it very lucrative. As well, this is most conveniently done with a line of credit, which carries a much higher interest rate than you can typically get a mortgage for. How do you calculate return on the Smith Manoeuvre (or are you using the return on the account as the return) Is it an after tax return? Would be interesting to compare your SM results from the results you would have without doing the SM. In essence, was it worth it?

My own investigation a few years ago into converting my mortgage into investment loans resulted in a conclusion that “It wasn’t worth it”. The amount of money involved in remortgaging the house to cover my investments did not make it very lucrative. As well, this is most conveniently done with a line of credit, which carries a much higher interest rate than you can typically get a mortgage for.

]]>