Canada BS Thread

Ya right now where I am houses are maybe 10-15% over what the should at most people say. Thats nothing normal inflation will take care of overtime

 

Inflation at about 2.5% right now

 

I was never suggesting a price crash, but for most young people it's very difficult to buy their first homes. My parents bought their first place in the 80's when interest rates were in the teens and they still had no problem renting and putting away enough for a down payment for a couple of years before they bought.

In Vancouver, Calgary, and TO right now the rental rates are through the roof. Unless your clearing more than $100K as a family unit and have no other debt, which most people out of university making that much have, it takes several years of living like hobo's before you can scrape together the mandatory 5% down payment on a +$500K home.

I got lucky and my parents gave me a small loan to help me get into my place that I was able to pay back to them in under a year. I also live in a rural setting so my house is worth a lot less than the national average yet very nice. If I had to rent and had any student debt I wouldn't of been so lucky. A lot of my friends, particularly those in the cities, are constantly complaining that they won't be able to buy there first home before 35. If you start a mortgage at 35, even if it's a 25 year mortgage, you are going to be paying for a house right up until your are trying to retire and what fun is that?

If interest rates go up 2% watch housing prices fall. So many people have debt levels right up to there necks, do you really think people with +$500K mortgages, $40K in student debt each, and two new cars in the driveway will be able to afford another 2% on there mortgage? I'm not saying the market will crash, but it will adjust downwards.

 

You only pay a 25 year mortgage for 25 years if you're dumb

Payment levels aren't going to get any cheaper , the real problem is coming up with the downpayment

 

So I'm dumb earning 8.7% average on my investments and paying a 2.69% mortgage . My mortgage is actually only a 20 year, most people are on 30 or 35 year mortgages now and can barely afford them. Not everyone is making good money in the middle class OZ, I don't only think about my situation like you do.

I'll pay my mortgage off when the interest rate is higher than my investments because I actually think about these things.

 

Anyone on a flexible rate interest rate during times like these isn't thinking straight. Things can change quickly.

However, IF INTEREST RATES ON YOUR FIXED RATE MORTGAGE ARE LOWER THAN YOUR INVESTMENTS, THEN INVEST! Play safe with a good chunk of it and you are farther ahead then simply throwing your money away on your mortgage at the equivalent of under 3% interest. Christ, my normal savings/buffer account almost gets that sort of interest lol.

 

You're only paying low interest on your mortgage for your current term and if you're near the beginning of the ammortization then you are mostly paying interest , so when rates go up and you decide it's time to pay down on the principal , your principal won't have reduced much at all . Compare that to paying even $100 / month on top of your minimum payment and you will take years of interest payments of your mortgage , especially at the beginning

And you have no idea if I make more or less money that you do

 

Yes, I understand amortization. I didn't make me decision to invest out of the blue. I should also mention the company I work for matches employee salary contributions on our RRSP's, deferred payment savings plan, and Pension Plan (they have all three available and I use all three). So that $100 I could be spending on my mortgage is $200 in the bank for retirement. I'll be done my mortgage before 45 years old, just in time to pay my kids college. I'm comfortable with that. I'll have a huge retirement savings plan by the time I choose to retire, and that's the end goal of managing money right?

I'm guessing you make more, by the way you somewhat talk up your own business. Which I congratulate you on. I can't fault you for your own success and would never do that to anyone.

 

That's true too . Sorry to sound harsh but I just had this argument with someone at work a few weeks ago and it's fresh in my mind. Per month it's costing them a few hundred bucks to pay off their house over investing.

 

If you don't mind me asking how long is your mortgage? Mine was 20 years to begin with. That makes a bit of difference too. I think in the USA you can still do 40 year mortgages right? If I was in that situation my numbers would be way different.

 

I have my own small business , I don't " talk it up " , plus I don't have somebody matching my RRSP contributions or a pension plan

Must be nice Thurston Howell the Third

 

I finished second in my class out of highschool in a class of 300. I aced the provincial Chemistry exam too. Earned a full ride scholarship that I then had to give up because the program I went into wasn't for me.

I ended up paying for my schooling because the U wouldn't switch my major and keep the scholarship I was on...

Smarts, grades, and hard work can make school cheaper but it can still cost money if things go awry from the plan. Luckily I found a good summer job every year and, again, my parents gave me small loans that I paid off with that money so I never was worried about interest.

 

I didn't insult you OZ, no need for the rich comments. My wife and I make a little above the average income for my area, but not by alot. I am VERY lucky to work for a good company.

My parents always are there to help us if we need it. That being said I've paid every penny back. Lucky, yes. Spoiled, no.

That being said my dad sold his outlet a few years back. I was hoping to save up enough by the time I was 30 to buy it from him but he got an offer he couldn't refuse. I wish I could of had that opportunity to run my own Agri Business. It's still a pipe dream of mine to get some financial backers and make a run of doing that someday.

 

I went to high school too , we mostly skipped out , drank beer and smoked dope in the park

 

So you've done very well. My dad flunked out of college and didn't have his first real job until he was 30. He spent his 20's drinking, racing snowmobiles for a local dealership, and working at his dads gravel pit.

He just sold his business at 60 for a lot of money. I know it's in the seven digits but I'm not sure how much higher than that. Too bad my generation doesn't have many stories like his and yours anymore though.

 

I went through a divorce at 25. I should mention that. So I do have some payments I can't get rid of that hurt every month.

 

Did you just put me in the same age bracket as your 60 year old dad ?

Lol

 

Yes I did, you're close enough .

 

I'm 46

 

It was a joke, like this:

Yeah.

I've been trying not to talk about it for a while, but it really sucks paying someone a swack load of money because they were an "artist" when they were married to you, but then they got a job right after the divorce so now they have two paychecks...

It blows. Not like a good hooker though .

I'm 28 and my daughter just turned a week old .