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> That kind of analysis really only works well for people who make a lot of housing purchases, and have cash reserves to cover rising rates. The VRM has no ris
by throw0101c 4y ago
> That kind of analysis really only works well for people who make a lot of housing purchases, and have cash reserves to cover rising rates.
The VRM has no rising costs: your monthly payments are the same. It's just the amount of principle paid off each month changes:
* if rates rise (like now), less principle is paid off
* if rates drip (the 10 years before this particular moment), more principal is paid off
But what gets taken out of your chequing account would be the same.
- itsoktocry 4y agoVRMs also have a trigger rate where payments increase, you can't accrue principal. Not sure how the banks will handle this yet, it's not in their interest to crush marginal mortgage holders.
- refurb 4y agoConsidering a bunch of Canadians are hitting trigger rates (interest > current per month payment) and seeing either 50% increases in monthly payments or request to make lump sum payment of tens of thousands, I’d say that’s not true.
- ryanisnan 4y agoI don't quite understand what you mean by "The VRM has no rising costs: your monthly payments are the same." This is definitely not the case. My mortgage payments have gone up by hundreds of dollars per payment.