3 ms·

The article discusses this and says that the average homeowner is paying $1200 extra per year now. Oddly the average mortgage payment, according to that articl

The article discusses this and says that the average homeowner is paying $1200 extra per year now. Oddly the average mortgage payment, according to that article, is around $4300. Lot of expensive homes in Canada, I guess. (I only pay $3200 in New York City, at 6.5%!)

frankus 3y ago
To be fair, that's about the same with the exchange rate, but the fact that the average mortgage cost across all of Canada is the same as one of the most expensive US markets is telling.
kaycebasques 3y ago
I'm looking for different data than what the article presents. The article mentions what a hypothetical owner that is past the fixed-rate grace period pays. I am looking for the percentage of homeowners overall that actually falls into that bucket that feels these rate hikes immediately. For example, if (hypothetically) 100% of the adjustable rate mortgages were opened last year, and they all had a 7-year fixed-rate grace period, then the rate hike doesn't actually affect any of them right now.
armanboyaci 3y ago
I am not sure but another reason could be the mortgage duration. In US 30-year is very common, according to my quick google search in Canada most mortgages are limited to a 25-year amortization period.
- rpeden 3y ago
  25 year amortization period, but even most "fixed rate" mortgages are only fixed for a 5 year term, at which point you have to renew at the prevailing rate. You can get a 10 year fixed rate but you'll pay a substantially higher interest. So many people with a fixed rate are still forced to renew for another term at a much higher rate right now. But as you mentioned, the shorter total duration probably explains part of the differential as well. That, and very high property prices in many parts of the country.
- 3vidence 3y ago
  Maybe you know but just wanted to add even with the 25 year amortization period the interest rate only stays fixed for 5 years (for most people). The people on variable vs fixed change over time but I think on average it is around 70% 5 year fixed, 30% variable rate

frankus 3y ago

To be fair, that's about the same with the exchange rate, but the fact that the average mortgage cost across all of Canada is the same as one of the most expensive US markets is telling.

kaycebasques 3y ago

I'm looking for different data than what the article presents. The article mentions what a hypothetical owner that is past the fixed-rate grace period pays. I am looking for the percentage of homeowners overall that actually falls into that bucket that feels these rate hikes immediately. For example, if (hypothetically) 100% of the adjustable rate mortgages were opened last year, and they all had a 7-year fixed-rate grace period, then the rate hike doesn't actually affect any of them right now.

armanboyaci 3y ago

I am not sure but another reason could be the mortgage duration. In US 30-year is very common, according to my quick google search in Canada most mortgages are limited to a 25-year amortization period.

rpeden 3y ago
25 year amortization period, but even most "fixed rate" mortgages are only fixed for a 5 year term, at which point you have to renew at the prevailing rate. You can get a 10 year fixed rate but you'll pay a substantially higher interest. So many people with a fixed rate are still forced to renew for another term at a much higher rate right now. But as you mentioned, the shorter total duration probably explains part of the differential as well. That, and very high property prices in many parts of the country.
3vidence 3y ago
Maybe you know but just wanted to add even with the 25 year amortization period the interest rate only stays fixed for 5 years (for most people). The people on variable vs fixed change over time but I think on average it is around 70% 5 year fixed, 30% variable rate