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Variable rates are great until rates dramatically increase. A huge number of Canadians will not be able to afford their mortgage payments over the next 5 years

Variable rates are great until rates dramatically increase. A huge number of Canadians will not be able to afford their mortgage payments over the next 5 years because they did not calculate rate rises when buying home. Furthermore, they won’t be able to sell the home without taking a huge loss because housing prices will have plummeted due to rate hikes. Combine that with rising cost of food and gas, Canadians are in for a wild ride.

nemo44x 4y ago
I’ve been saying this for a long time now and none of my Canadian friends seem to understand. I guess they’ve only seen rates continue to drop over the last 40 years. But I think people will be shocked when their interest rate is 10% soon. It sounds unthinkable but it’s the only way to get inflation under control. I expect a massive crash in the Canadian home market. In certain areas that have been high fliers I’d expect 50% - 60% declines or larger. Combine exploding interest rates, high inflation, and banning foreign buyers, the housing market is about to get “cheap” for cash buyers.