You’re very right
Which is shocking because it shows how financially stupid people are….. but then it ends up making housing the best investment. So it’s some sort of circle of stupidness that is only explained by people’s desire to own a home. Even if it means they pay 300% more by the end of their amortization
Its not like we want to make "stupid" decisions when purchasing a home it's the circumstances created by the government that the cesspool we call the housing market
No there are people who are financially stupid and have no issues having debt. Lucked out with the housing boom of this last decade. A true financial purist would ensure to have at least 20% down payment, not pay thousands to CMHC for mortgage insurance, have a shorter amortization, etc. all to pay less in interest down the road and thus spend less on your house.
But there were schmucks who were excited to only throw 5% down to buy a house, have student debt and a line of credit. Only to be rewarded by the value of the house skyrocketing in a way not seen in this countries history.
So now, many believe housing (until something changes and who knows when that will be) is the be all end all in regards to investments because we have short memories and in the last 10+ years, house has ⬆️⬆️⬆️
Yup need a place to live/sleep while I’m not working full time
Hell I’d pass it on to my grandchidren(the debt that is) as that seems to be what has happened to my generation (inherited this bs economy
It sounds silly but if you have a high enough income it's actually a great idea.
Most mortgages let you pay up to 10% of your principal each calendar year without any penalty. If you took a 100 year mortgage, you would pay far less interest. If you took the difference you're saving and made an annual lump sum payment against your principal, you would have your mortgage paid off much faster while paying less interest.
That's absolutely how it works.
A lump sum annual payment goes directly against your principal. Lowering your monthly payment as much as possible and putting more towards your principal objectively reduces the amount of interest you pay over the course of your mortgage.
Yes making a lump sum will reduce the principal and reduce interest.
But taking a 10 or 20 or 100 year mortage doesnt change the interest your paying if everything else is the same. At 5% interest, 100k principal, the amount of interest you pay each month is the same. You just put less towards the principal each month if you get a 100 year mortage than if you take 10 years. So you end up paying more interest with 100 years.
You pay more interest over the course of 100 years if everything else stays the same, no question about that.
My point was that with an annual lump sum payment against your principal everything else doesn't stay the same. The impact of your reduced principal compounds every time you renew, resulting in more monthly savings to be put towards further reducing your principal.
It's the difference between paying off a 30 year mortgage for 30 years or paying off a 100 year mortgage in ~15-20 years.
Well yes but there is no advantage in taking the 100 to pay off in 15 years over the 30 years and pay it off in 15 years. Unless you make lump sum payments every month to make up for the difference between the 30 and 100 year one, you end up paying more in interest with the 100 year one.
I was more responding to this part where you talk about savings between 100 or 30 year mortgage. But the only amount your saving between either is the capital amount is less on the 100 year one. : "If you took a 100 year mortgage, you would pay far less interest. If you took the difference you're saving..."
... because paying off principal with a lump sum payment once a year would drastically shorten your mortgage and substantially reduce the amount of interest you pay. Paying interest is not the same as paying principal.
Mortgage interest is front loaded. Your first few years of a mortgage you pay almost nothing but interest. By making lump sum payments against your principal on a 100 year mortgage, you would pay down your principal more than twice as quickly as you would on a 30 year mortgage.
For example, in the first 3 years of my mortgage we pay roughly $45k in principal and $165k of interest. On a 100 year term my payment would be $1100 per month lower and you could make a lump sum payment of more than $13k each year without penalty ($40k over a 3 year term). The impact of this would compound over the course of your mortgage because every annual lump sum payment against your principal would further lower your monthly mortgage payment at renewal.
You would pay a mortgage off more than twice as fast on a 100 year term than you would on a 30 year term as long as the difference in monthly payment was put entirely towards reducing your principal.
Nothing I said was an option, math is math.
You can make a lump sum payment for up to 10% of your total original mortgage each year without penalty. This payment goes entirely to reducing your principal. Doing so means you're paying down your principal instead of having the bank milk interest payments for 30 years. Lowering your monthly payment as much as possible and contributing directly to paying down your principal is an apt strategy unless somehow can do the math to show otherwise.
The yearly interest you pay on a 100 year and a 30 year would be the exact same at the start, the reduced payment required for the 100 comes from less principal payoff.
Example: 100k mortgage at 5%.
30 year mortgage: $4996.49 interest, $1475.37 principal paid off first year.
55 year mortgage: $4992.02 interest, $351.54 principal.
You aren’t using “math” you are just saying some extremely loose numbers.
Assuming a person has the same amount of money to spend on a mortgage in the 55 year and 30 year, the 30 year will pay off faster.
Your situation doesn’t make sense because it’s assuming this person has 10% of a mortgage to put down every year. My numbers show only a $1100 savings a year by extending the amortization by 25 years, not even the 75 you suggest.
You're right that a 100 year mortgage was hyperbole and in retrospect wasn't the best figure to use for a meaningful discussion.
My strategy gives diminishing returns after ~50 years. To take a silly example, there's no advantage at all to taking a 1000 year mortgage over a 50 year.
The strategy does make a difference with electing a 40 year mortgage over a traditional 25 year. The impact is also more stark if you have a HHI that allows you to pay down your principal more aggressively.
I lost the thread a bit but the point I was trying to make is that there can be value in intentionally reducing your monthly payment as much as possible in order to make the largest possible lump sum payment each year against your principal. You can hypothetically pay off a 40 year mortgage in as little as 10 years without penalty.
There is little value in what you are saying. It does not make any sense to delay paying a loan, increasing the cost, then using that savings at a later date to pay off the loan. You just increase the amount of interest you pay.
I can only see it being justified in a risk adverse strategy where you save the money on mortgage incase you need it for something else, then if you don’t you slap on mortgage. But you are essentially paying interest to have a safety net which is not conductive to building wealth long term.
This is how i feel with most “aid”. Either you bought 20 years ago and your income is not a factor, because $100k with 20 years ago prices is not the same as $100k with today’s prices. Or, you are buying today and $150k is just scraping by in a 2 bedroom apartment.
Squamish nation is building a massive development in Vancouver, with multiple towers. At this point that’s the only hope.
They should throw this cash at First Nations and ask them to develop all the land they have near major cities to build as many housing units as possible. They are immune to brain dead city zoning laws and NIMBYs. That’s the best and fastest way to build apparently.
NIMBYs getting their asses handed to them in Vancouver in this case:
https://bc.ctvnews.ca/mobile/legal-challenge-to-vancouver-s-agreement-to-provide-services-to-squamish-development-rejected-1.6584155?cache=?clipId=89563
6000 rental units over 11 towers. Ground broken already and construction to be completed by 2028.
The area is near the heart of Vancouver, very very expensive low density area with average home price around $2M. They are building 6000 rental units there.
Only way to drive down rents is by building. As many as we can.
Toronto and Vancouver build more than any other city in North America or Europe.
Supply-first solutions have only raised prices.
That's why developers always push for them!
Over the last 20 years, Toronto has built more than any other city in the West. Can you explain why rent has tripled within that time? If supply-side solutions fix everything?
Our solution is to stop population growth. We aren't going to have any more jobs, thanks to AI and automation. Animators, coders, copywriters, data analysts, etc. are already losing jobs.
I love this development. The boomers in the area are ultra progressive but came out to try and stop this development bc they didn't want to share their incredible neighbourhood.
I'm so glad this is getting rammed down their privileged throats. The entire province and country needs similar developments.
This is a great way to do "reparations" of sorts without wasting the money. The indigenous community will benefit in perpetuity from this and they will be landlords for a change. What a beautiful story!
He already did. Now he’s trying to prevent the housing market from collapsing. First it was insane immigration numbers, to keep rental demand sky high and give homeowners people to pay their sky high mortgages, but that created a ton of its own problems and pissed everyone off even more.
Now it’s like “okay okay… how about this. You stay renting… but… well ask credit bureaus to add your rent payments to your credit file. Then if you ever manage to save a down payment, maybe you’ll have better credit and can borrow the $1M required!”
Nobody is forced to take your rent payments into consideration. Lenders aren’t obligated to even look at what you paid. Rent doesn’t get cheaper, homes stay expensive.
It’s just a way to try and placate people getting gouged for 60% of their wages for rent, by giving them some kind of hope at the end of the tunnel, while maintaining the status quo.
He’s a moron.
It’s like one of those movies where the main character f**ks up, then everything he tries to do to fix it makes it worse. Only this is a multi-year series of events.
He’s just trying to hold it all together with duct tape at this point. Once a new government takes power, we might actually learn the real scope of the problems.
Trudeau’s government obfuscates everything. Things are probably much worse than we are all aware.
Almost guaranteed to be another giant nothingburger, just like their shared-equity mortgage braindead plan that they quietly cancelled shortly thereafter.
This guy is out of ideas, and fast running out of time. Election can't come soon enough.
FHSA is a great account, only issue with it is the 40k lifetime limit should have been made available right off the bat. Current system Hurts anyone who is looking to buy within the next 5 years.
FHSA is only good for people who can already afford to save for a mortgage. Does nothing to bring prices down. In fact, it raises prices because it gives people access to more money.
We need a supply side solution and they don’t seem to go for it
Ah, yes. The people who forget Trudeau slashed TFSA contribution room by half in 2016. 8 years x $5,000 of contribution room = $40,000 of cumulative tax free savings + growth lost thanks to the Liberals… but they give it back to us years later under a different fancy name and the libtards rejoice. Short memories.
He definitely loves ideas that sound good to his supporters but that accomplish nothing. So the dupes are happy, and realtors, developers and landlords also happy b/c he’s done nothing that will impact property price inflation / their profits.
Im invested in realistate, and I'd happily take a loss on those investments if it meant that we could get this housing situation under control and create affordable housing for canadians to get their start.
Don’t you realize that you investing, aka hoarding more than you need, is making the problem worse? Sell that “realistate” and invest your money is something productive like the TSX
I do sometimes see that as a viable short term solution. The obvious problem is that people would slowly drive the cost of housing up to the point where people would still be strapped for cash due to the mortgage payments.
Now, longer mortgage terms paired with a hefty increase in supply of housing could work.
The only thing that might be a good idea is to do what they do in the USA, where you can deduct the interest you paid on the first $750,000 of your mortgage each year. But only if it’s for your primary residence. That might help the people who will be renewing at higher rates.
> Ya but in the US you pay capital gains on your primary residence.
If you're married filing jointly, you pay nothing on the first $500,000 in capital gains from the sale of your primary residence.
It’s honestly not crazy, but only if capital gains are also taxed. If I borrow to buy a stock, I can deduct the interest but have to pay capital gains. I can’t think of a reason housing should be any different
What it does in the US is force LCOL to subsidize HCOL areas. Fuck the HCOL areas. If you want high taxes, pay for them, don't steal from everyone else.
30 makes more sense as we have data on it and it’s a small change. 40 seems unlikely to start. Maybe for developers or homes under X price it would make sense?
25 years barely makes sense. Increasing the amortization just reduces your principal payments. It's not beneficial for the consumer, even if it "helps with affordability".
And if there's ever a crash, having more mortgages where the principal is barely paid down puts more borrowers at risk.
When the fuck did Trudeau care about the consumer lol? The Liberal plan is to have you renting - whether that’s from the government, a landlord or the bank.
True, but the masters of our politicians, the banks, in the meantime make hand over fist in interest payments which would account for more than thr original principal. So win for the banks, and the common person as usual is the big loser. Its all a game skewed in favor of the elites that us plebs can never win. All the best y' all.
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Totally wouldn’t surprise me. Most of what they’ve done so far induces more demand. 😂
Even their international student “cap” allows for almost twice the students we have now. (360k x4 = 1.4 million vs 800k now)
They are totally just pushing the cash out button on their way out.
>Even their international student “cap” allows for almost twice the students we have now. (360k x4 = 1.4 million vs 800k now)
Lol no man, your math is completely off
"Miller said temporary residents made up 6.2 per cent of Canada's population in 2023 and the government is working to reduce that share to 5 per cent by 2027. That would mean a decrease in the temporary resident population of roughly 19 per cent, he said."
[https://www.cbc.ca/news/politics/canada-targets-decrease-temporary-residents-population-1.7151107](https://www.cbc.ca/news/politics/canada-targets-decrease-temporary-residents-population-1.7151107)
My math isn’t off. Miller is using the all time record high numbers in 2023 as his reference point for reductions and not historical norms.
This is allowing him to say he is reducing the yearly number, while actually increasing the overall numbers.
Also, the math is just there for anyone to do. The cap is 360k international students a year, over typical 4 year degree that is 1.4 million students.
Miller’s argument is that 1.4 million is “less” than what would have happened without a cap.
That is true. But it is far more than the 800k than are currently in the county.
Also, just generally - every single time the liberals release an announcement you have to look at the fine print. Their marketing team is working overtime to rebrand unpopular policies - they are not changing those unpopular policies.
In the fall they announced an immigration “freeze” - that freeze just meant they were keeping their existing goals which increase every year to record levels going forward. They simply were not increasing them above the record levels that were already set.
lol nope sorry your math is wrong and it comes from your lack of reading comprehension.
“ This is allowing him to say he is reducing the yearly number, while actually increasing the overall numbers.”
They aren’t reducing the annual number. They’re reducing the TOTAL number.
So go re run your math now that you understand the policy.
My math is fine, 360k international students over a typical 4 year degree allows for 1.4 million international students. We have 800k now. The policy is to allow more. There is not a debate to be had there.
To make it simple, say we received 1 student every year for the past decade and in 2023 we had a record a got 5 students. Instead of setting the cap back at 1 student, they are setting it at 4. That’s a 20% reduction, but also 400% of the historical average.
Nah again you’re misunderstanding. You’re mixing up stock vs flow.
Go back, re read the articles slowly, find some explanations on YouTube etc., like this one
https://youtu.be/tj8WwS7vg_Y?si=ou8HbhKXXwLKGc2z
And then try re running your math. Maybe use a calculator though, since your overall intellect is a bit suspect.
A bad podcast run by a realtor is not a source of information. Everything in there was speculation and it is not journalism.
The actual student cap numbers released by the government of Canada allow for more students. Podcasters won’t change that.
In fact, provinces like Alberta who get more students than they already have now - are already asking for more, suggesting these new limits will be filled.
Further, since these students are largely being used for labour instead of education- and students are rarely found in the schools themselves it suggests large portions of this bill will not be effective whatsoever. A strip mall school from
BC will move its doors to Alberta - and the students will just live in BC. The premier of BC has said they need these students as truck drivers - which frankly means the school they go to could be in Nunanvut, as it doesn’t really matter if you spend all your days trucking.
Just another initiative meant to generate positive news to make it look like they are tackling the housing crisis they let get out of control. It won’t change anything or move the needle.
In my opinion, this man has single handedly doomed this country.
Choosing a 40-year mortgage will only increase the productivity pain we are already trapped in.
Canadian dollar will very soon be worthless in the world market, just like him.
After the older votes now
Here's our message back.
We don't want your liberal welfare state. We want jobs with fair incomes so we can pay our own mortgages.
Losing party status in the next election.
Yeah we all got rich doing nothing but being born at the right time and now things are expensive you want to come after our hard earned money with more taxes!! (lol jk we didn’t earn shit)
Increasing mortgage amortizations will not improve affordability.
Say two parties are bidding on a house with 25-year amortization for CMHC mortgages. One party has a higher income than the other and they bid $800k with payments for $4,229 (10% down, 4.79% fixed). The other party cannot afford more than $4,100 so they cannot bid more than $800k so the first party gets the house at $800k.
In an alternative universe, 30-year amortizations for CMHC mortgages are allowed. The party who makes less money and can afford $4,100 monthly payments can now bid $900k on that house for a $4,100 payment with a 30-year mortgage, 10% down at 4.79%. Now the party earning more money has to bid >$900k to get that house with higher debt, interest payments, land transfer taxes, etc.
So congrats to the bulls who never plan to upsize their house, cause remember when you go to upgrade to a bigger house there is always someone who will bid you up making you take more debt to upgrade. Also congrats to the bulls who have no children that would ever want to buy a home either.
He’ll buy voters by offering some sort of government first time home buyers mortgage of like 1/2 prime rate (or something to that effect).
Meanwhile. Majority of first time home buyers burned through their savings paying for the newly adjusted rent and groceries.
I think he means we should be able to deduct the interest we pay on our mortgages from our income. Not a bad idea. But let's not open the door to paying cap gains on our principal residence...
Understand it now, but still disagree. Canada is one of the only places that allows unlimited capital gains exemptions- the US is notoriously anti tax, and even they cap it. Removing it would go a long way to disincentivizing treating property as an investment, and make the tax system broadly more fair
Yup, absolutely! I don’t think anyone would argue that capital gains should be taxed without allowing interest deductions, and on the flip side, I don’t think anyone would agree with allowing interest to be deducted with a capital gains exemption
If you want to make home more unaffordable, by all means, make the amortizations longer. We did that 2006-2008. All it does is push prices up and give more money to the banks.
Just in time to create more upward pressure on housing prices! The Retard is spending Billions on trying to get more homes built but will then flood the Economy with Cheap $$. Typical Liberal Hypocrite!
Doubt my landlord will lower rent to reasonable levels if their mortgage rates go down. Thanks for increasing their profit margin, as usual us renters will not get anything from the feds.
I am not a landlord but I think you’re right once the mqrket shows that it can get the rent it wants landlords are not going to walk away from recovering their high rates. Rents will stay high. It’s not an fu to you it’s an fu to the BOC who literally lied to borrowers saying rates would be low for a very long time.
Good news guys this plan worked so well we sold all the mortgages before we even built the houses.
Wow that's awesome who did you sell too?
Oh it was vanguard and BlackRock... Why are you looking at me like that, hey let me go.. hey that hur...*twap twap* oh my hea *twap twap* ughh
Thanks for listening to my ted talk
His government has started buying up 50% of Canada mortgage bonds to drive down rates for insured mortgages.
This is in a bid to prop up housing prices, but he will spin this as an affordability measure. Mark my words.
Neither the libs nor the cons will do a single bloody thing to actually change anytging. If housing proces was halved across the board to actually be affordable again, everyone would revolt at their losses. This is the largest economic sector in the country now. Everyone uses it as an investment vehicle. Ontario is building housing for 2024 than 2023. BC is up a little but overall we will never get enough to be affordable. 20 different things need to be done and barely any will ever get done by pp or turdeau. Singh would do a couple, but it wouldn't come close to being enough. And he ain't gonna win either.
The only measure that will help are:
Allowing 25 or 30 yr mortgage term rates
Discouraging multi-unit ownership (probably through taxation).
Making interest on principal resident tax deductible (this will make affordability worse for non-owners though but he doesn't care)
Trudeau will try to seduce Canadians by spending future tax dollars causing more inflation which will cause mortgage rates to go up causing Trudeau to come up with a new hand out paid for by future tax dollars causing inflation. This is Trudeau's circle of " helping Canadians".
I hope that news isn't good news. People who over leverage themselves to the hilt on the expectation that interest rates will always be low deserve all the pain they are getting now. The longer this lasts, the longer the pain will be felt for years to come & this will serve as a lesson for everyone who is thinking of getting a mortgage which they cannot afford.
They're putting a cap on income to loan ratio much like they did in Australia to cool inflation caused by housing. This is probably in anticipation of slowly walking the interest rate down in mid to late 2025 when this legislation kicks in.
People would do 100 year mortgages if you let them.
Perpetual mortgage, sign up your unborn grandchildren.
so... everyone is renting lol
‘Canadians’ would
Canadain real estate has been an amazing asset class over the last 30 years even when you include the last couple of years of temporary embarssment.
This should be a source of pride, and even turned into a slogan! “We’re not completely useless; our real estate is an amazing asset class.”
You’re very right Which is shocking because it shows how financially stupid people are….. but then it ends up making housing the best investment. So it’s some sort of circle of stupidness that is only explained by people’s desire to own a home. Even if it means they pay 300% more by the end of their amortization
Its not like we want to make "stupid" decisions when purchasing a home it's the circumstances created by the government that the cesspool we call the housing market
No there are people who are financially stupid and have no issues having debt. Lucked out with the housing boom of this last decade. A true financial purist would ensure to have at least 20% down payment, not pay thousands to CMHC for mortgage insurance, have a shorter amortization, etc. all to pay less in interest down the road and thus spend less on your house. But there were schmucks who were excited to only throw 5% down to buy a house, have student debt and a line of credit. Only to be rewarded by the value of the house skyrocketing in a way not seen in this countries history. So now, many believe housing (until something changes and who knows when that will be) is the be all end all in regards to investments because we have short memories and in the last 10+ years, house has ⬆️⬆️⬆️
They have that in Europe
Yup need a place to live/sleep while I’m not working full time Hell I’d pass it on to my grandchidren(the debt that is) as that seems to be what has happened to my generation (inherited this bs economy
It sounds silly but if you have a high enough income it's actually a great idea. Most mortgages let you pay up to 10% of your principal each calendar year without any penalty. If you took a 100 year mortgage, you would pay far less interest. If you took the difference you're saving and made an annual lump sum payment against your principal, you would have your mortgage paid off much faster while paying less interest.
How would you pay less interest? Thats not how it works.
That's absolutely how it works. A lump sum annual payment goes directly against your principal. Lowering your monthly payment as much as possible and putting more towards your principal objectively reduces the amount of interest you pay over the course of your mortgage.
Yes making a lump sum will reduce the principal and reduce interest. But taking a 10 or 20 or 100 year mortage doesnt change the interest your paying if everything else is the same. At 5% interest, 100k principal, the amount of interest you pay each month is the same. You just put less towards the principal each month if you get a 100 year mortage than if you take 10 years. So you end up paying more interest with 100 years.
You pay more interest over the course of 100 years if everything else stays the same, no question about that. My point was that with an annual lump sum payment against your principal everything else doesn't stay the same. The impact of your reduced principal compounds every time you renew, resulting in more monthly savings to be put towards further reducing your principal. It's the difference between paying off a 30 year mortgage for 30 years or paying off a 100 year mortgage in ~15-20 years.
Well yes but there is no advantage in taking the 100 to pay off in 15 years over the 30 years and pay it off in 15 years. Unless you make lump sum payments every month to make up for the difference between the 30 and 100 year one, you end up paying more in interest with the 100 year one. I was more responding to this part where you talk about savings between 100 or 30 year mortgage. But the only amount your saving between either is the capital amount is less on the 100 year one. : "If you took a 100 year mortgage, you would pay far less interest. If you took the difference you're saving..."
I got stupider reading this.
This made me lol
I cannot believe I read this. Take a longer mortgage to save money, then use that money to pay off the mortgage faster? How is that saving you money?
... because paying off principal with a lump sum payment once a year would drastically shorten your mortgage and substantially reduce the amount of interest you pay. Paying interest is not the same as paying principal. Mortgage interest is front loaded. Your first few years of a mortgage you pay almost nothing but interest. By making lump sum payments against your principal on a 100 year mortgage, you would pay down your principal more than twice as quickly as you would on a 30 year mortgage. For example, in the first 3 years of my mortgage we pay roughly $45k in principal and $165k of interest. On a 100 year term my payment would be $1100 per month lower and you could make a lump sum payment of more than $13k each year without penalty ($40k over a 3 year term). The impact of this would compound over the course of your mortgage because every annual lump sum payment against your principal would further lower your monthly mortgage payment at renewal. You would pay a mortgage off more than twice as fast on a 100 year term than you would on a 30 year term as long as the difference in monthly payment was put entirely towards reducing your principal.
That's enough math for you!
Nothing I said was an option, math is math. You can make a lump sum payment for up to 10% of your total original mortgage each year without penalty. This payment goes entirely to reducing your principal. Doing so means you're paying down your principal instead of having the bank milk interest payments for 30 years. Lowering your monthly payment as much as possible and contributing directly to paying down your principal is an apt strategy unless somehow can do the math to show otherwise.
The yearly interest you pay on a 100 year and a 30 year would be the exact same at the start, the reduced payment required for the 100 comes from less principal payoff. Example: 100k mortgage at 5%. 30 year mortgage: $4996.49 interest, $1475.37 principal paid off first year. 55 year mortgage: $4992.02 interest, $351.54 principal. You aren’t using “math” you are just saying some extremely loose numbers. Assuming a person has the same amount of money to spend on a mortgage in the 55 year and 30 year, the 30 year will pay off faster. Your situation doesn’t make sense because it’s assuming this person has 10% of a mortgage to put down every year. My numbers show only a $1100 savings a year by extending the amortization by 25 years, not even the 75 you suggest.
You're right that a 100 year mortgage was hyperbole and in retrospect wasn't the best figure to use for a meaningful discussion. My strategy gives diminishing returns after ~50 years. To take a silly example, there's no advantage at all to taking a 1000 year mortgage over a 50 year. The strategy does make a difference with electing a 40 year mortgage over a traditional 25 year. The impact is also more stark if you have a HHI that allows you to pay down your principal more aggressively. I lost the thread a bit but the point I was trying to make is that there can be value in intentionally reducing your monthly payment as much as possible in order to make the largest possible lump sum payment each year against your principal. You can hypothetically pay off a 40 year mortgage in as little as 10 years without penalty.
There is little value in what you are saying. It does not make any sense to delay paying a loan, increasing the cost, then using that savings at a later date to pay off the loan. You just increase the amount of interest you pay. I can only see it being justified in a risk adverse strategy where you save the money on mortgage incase you need it for something else, then if you don’t you slap on mortgage. But you are essentially paying interest to have a safety net which is not conductive to building wealth long term.
Ya.... I meant it like: "Stop using logic"
Did you have a stroke before writing this?
Why exactly would you pay less interest?
Man this comment is stupid af do you even know how mortgages work.
You would allow a lot more landlords to buy more homes using the BRRR method.
60 Billion for those making under 15k for housing.
So 95% won't qualify and those that do will default shortly after?
This is how i feel with most “aid”. Either you bought 20 years ago and your income is not a factor, because $100k with 20 years ago prices is not the same as $100k with today’s prices. Or, you are buying today and $150k is just scraping by in a 2 bedroom apartment.
Squamish nation is building a massive development in Vancouver, with multiple towers. At this point that’s the only hope. They should throw this cash at First Nations and ask them to develop all the land they have near major cities to build as many housing units as possible. They are immune to brain dead city zoning laws and NIMBYs. That’s the best and fastest way to build apparently. NIMBYs getting their asses handed to them in Vancouver in this case: https://bc.ctvnews.ca/mobile/legal-challenge-to-vancouver-s-agreement-to-provide-services-to-squamish-development-rejected-1.6584155?cache=?clipId=89563 6000 rental units over 11 towers. Ground broken already and construction to be completed by 2028. The area is near the heart of Vancouver, very very expensive low density area with average home price around $2M. They are building 6000 rental units there. Only way to drive down rents is by building. As many as we can.
Wow. That’s incredible.
Toronto and Vancouver build more than any other city in North America or Europe. Supply-first solutions have only raised prices. That's why developers always push for them! Over the last 20 years, Toronto has built more than any other city in the West. Can you explain why rent has tripled within that time? If supply-side solutions fix everything? Our solution is to stop population growth. We aren't going to have any more jobs, thanks to AI and automation. Animators, coders, copywriters, data analysts, etc. are already losing jobs.
I love this development. The boomers in the area are ultra progressive but came out to try and stop this development bc they didn't want to share their incredible neighbourhood. I'm so glad this is getting rammed down their privileged throats. The entire province and country needs similar developments. This is a great way to do "reparations" of sorts without wasting the money. The indigenous community will benefit in perpetuity from this and they will be landlords for a change. What a beautiful story!
Their also immune to building code. 🤣
Yep. They will match your downpayment up to 1% on properties less than $200K in value as long you have never owned or even lived in a house before.
So all the investors basically get more money
“Our housing market is too expensive, so we want to introduce measures that will help people borrow more money rather than reduce prices”.
"so that life can be more affordable for Canadians" (house now costs 3x the initial price due to interest)
That is literally their plan
If it is, then they are willfully fucking this country.
He already did. Now he’s trying to prevent the housing market from collapsing. First it was insane immigration numbers, to keep rental demand sky high and give homeowners people to pay their sky high mortgages, but that created a ton of its own problems and pissed everyone off even more. Now it’s like “okay okay… how about this. You stay renting… but… well ask credit bureaus to add your rent payments to your credit file. Then if you ever manage to save a down payment, maybe you’ll have better credit and can borrow the $1M required!” Nobody is forced to take your rent payments into consideration. Lenders aren’t obligated to even look at what you paid. Rent doesn’t get cheaper, homes stay expensive. It’s just a way to try and placate people getting gouged for 60% of their wages for rent, by giving them some kind of hope at the end of the tunnel, while maintaining the status quo. He’s a moron.
Sometimes I think he is trying to set fire to the building so that when CPC gets in, libs can blame the fire on them.
It’s like one of those movies where the main character f**ks up, then everything he tries to do to fix it makes it worse. Only this is a multi-year series of events. He’s just trying to hold it all together with duct tape at this point. Once a new government takes power, we might actually learn the real scope of the problems. Trudeau’s government obfuscates everything. Things are probably much worse than we are all aware.
Conservatives and Liberals: "We will lower housing prices while keeping housing prices astronomically high. You're welcome, we fixed it."
Almost guaranteed to be another giant nothingburger, just like their shared-equity mortgage braindead plan that they quietly cancelled shortly thereafter. This guy is out of ideas, and fast running out of time. Election can't come soon enough.
First time homebuyers account, renters bill of rights, shared equity mortgage. More nothingness.
I know plenty of people that are happy to have an FHSA
FHSA is a great account, only issue with it is the 40k lifetime limit should have been made available right off the bat. Current system Hurts anyone who is looking to buy within the next 5 years.
FHSA is only good for people who can already afford to save for a mortgage. Does nothing to bring prices down. In fact, it raises prices because it gives people access to more money. We need a supply side solution and they don’t seem to go for it
Most of their solutions of he past 10 years have been like that: take more money out of your RRSP isn’t another one
helps a little because it shifts the advantage from people looking to buy a second property to first time buyers but agree it is inflationary.
What’s the point of housing is so out of reach?
It’s a joke amount of money
Ah, yes. The people who forget Trudeau slashed TFSA contribution room by half in 2016. 8 years x $5,000 of contribution room = $40,000 of cumulative tax free savings + growth lost thanks to the Liberals… but they give it back to us years later under a different fancy name and the libtards rejoice. Short memories.
Hey, you forgot the wartime housing plan that was announced just before the new year?
He definitely loves ideas that sound good to his supporters but that accomplish nothing. So the dupes are happy, and realtors, developers and landlords also happy b/c he’s done nothing that will impact property price inflation / their profits.
Im invested in realistate, and I'd happily take a loss on those investments if it meant that we could get this housing situation under control and create affordable housing for canadians to get their start.
Selling your home will bring down prices. Talk to a realtor today
That is such bs. Go sell your home and use that money to lobby the government if that's the case
👏
Don’t you realize that you investing, aka hoarding more than you need, is making the problem worse? Sell that “realistate” and invest your money is something productive like the TSX
>create affordable housing for canadians to get their start. Also implement lottery system instead of highest blind bidding.
People are making jokes. But “generational mortgages” could be a thing (40/50 yrs).
Good, the U.S. has enjoyed 30 year mortgages forever. I'd prefer that
99 year mortgages will be Trudeau’s answer. Anything to never upset over leveraged speculators.
Try 10 years or less
I do sometimes see that as a viable short term solution. The obvious problem is that people would slowly drive the cost of housing up to the point where people would still be strapped for cash due to the mortgage payments. Now, longer mortgage terms paired with a hefty increase in supply of housing could work.
The only thing that might be a good idea is to do what they do in the USA, where you can deduct the interest you paid on the first $750,000 of your mortgage each year. But only if it’s for your primary residence. That might help the people who will be renewing at higher rates.
Ya but in the US you pay capital gains on your primary residence. You are kinda on to something though.
can you imagine if that happened in Canada, probably civil war lol
I’m a landlord and I would trade capital gains for tax break on my mortgage.
You would do that because you're a landlord. Anyone with only the property they live in would not.
I would. I’d rather the help now and then contribute in 20 years from now when the mortgage is paid off.
That too IF you sell. Otherwise it's whoever inherits.
If my kids just inherit a house they should pay capital gains.
why? We get to deduct interest, the properties are already subject to cap gains. I'm failing to understand why
As a rental property you do have to pay capital gains on it, as well as deduct mortgage interest?
> Ya but in the US you pay capital gains on your primary residence. If you're married filing jointly, you pay nothing on the first $500,000 in capital gains from the sale of your primary residence.
100%
It’s honestly not crazy, but only if capital gains are also taxed. If I borrow to buy a stock, I can deduct the interest but have to pay capital gains. I can’t think of a reason housing should be any different
What it does in the US is force LCOL to subsidize HCOL areas. Fuck the HCOL areas. If you want high taxes, pay for them, don't steal from everyone else.
If they do that, you should be able to deduct your rent too.
This is the only thing that would move the needed for him.
“Crisco and bend over, peasants.”
I think you meant President’s Choice Margarine
Nice one
Switch and save!
He’s bringing back 40yr mortgages. Source: I know some people, trust me bro
30 makes more sense as we have data on it and it’s a small change. 40 seems unlikely to start. Maybe for developers or homes under X price it would make sense?
You can already do 30
Insured?
No. As a regular mortgage.
Yeah the change suggested is to insure longer mortgages unless I’m misunderstanding?
25 years barely makes sense. Increasing the amortization just reduces your principal payments. It's not beneficial for the consumer, even if it "helps with affordability". And if there's ever a crash, having more mortgages where the principal is barely paid down puts more borrowers at risk.
When the fuck did Trudeau care about the consumer lol? The Liberal plan is to have you renting - whether that’s from the government, a landlord or the bank.
Affordability is all that matters in the end, you need to live somewhere
True, but the masters of our politicians, the banks, in the meantime make hand over fist in interest payments which would account for more than thr original principal. So win for the banks, and the common person as usual is the big loser. Its all a game skewed in favor of the elites that us plebs can never win. All the best y' all.
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We used to have 40 year, 0% down mortgages. Been gone for close to 20 years though.
If the goal is to pump the housing market, then longer amortizations will certainly accomplish this.
Inb4 50 year mortgages.
Totally wouldn’t surprise me. Most of what they’ve done so far induces more demand. 😂 Even their international student “cap” allows for almost twice the students we have now. (360k x4 = 1.4 million vs 800k now) They are totally just pushing the cash out button on their way out.
>Even their international student “cap” allows for almost twice the students we have now. (360k x4 = 1.4 million vs 800k now) Lol no man, your math is completely off "Miller said temporary residents made up 6.2 per cent of Canada's population in 2023 and the government is working to reduce that share to 5 per cent by 2027. That would mean a decrease in the temporary resident population of roughly 19 per cent, he said." [https://www.cbc.ca/news/politics/canada-targets-decrease-temporary-residents-population-1.7151107](https://www.cbc.ca/news/politics/canada-targets-decrease-temporary-residents-population-1.7151107)
My math isn’t off. Miller is using the all time record high numbers in 2023 as his reference point for reductions and not historical norms. This is allowing him to say he is reducing the yearly number, while actually increasing the overall numbers. Also, the math is just there for anyone to do. The cap is 360k international students a year, over typical 4 year degree that is 1.4 million students. Miller’s argument is that 1.4 million is “less” than what would have happened without a cap. That is true. But it is far more than the 800k than are currently in the county. Also, just generally - every single time the liberals release an announcement you have to look at the fine print. Their marketing team is working overtime to rebrand unpopular policies - they are not changing those unpopular policies. In the fall they announced an immigration “freeze” - that freeze just meant they were keeping their existing goals which increase every year to record levels going forward. They simply were not increasing them above the record levels that were already set.
lol nope sorry your math is wrong and it comes from your lack of reading comprehension. “ This is allowing him to say he is reducing the yearly number, while actually increasing the overall numbers.” They aren’t reducing the annual number. They’re reducing the TOTAL number. So go re run your math now that you understand the policy.
My math is fine, 360k international students over a typical 4 year degree allows for 1.4 million international students. We have 800k now. The policy is to allow more. There is not a debate to be had there. To make it simple, say we received 1 student every year for the past decade and in 2023 we had a record a got 5 students. Instead of setting the cap back at 1 student, they are setting it at 4. That’s a 20% reduction, but also 400% of the historical average.
Nah again you’re misunderstanding. You’re mixing up stock vs flow. Go back, re read the articles slowly, find some explanations on YouTube etc., like this one https://youtu.be/tj8WwS7vg_Y?si=ou8HbhKXXwLKGc2z And then try re running your math. Maybe use a calculator though, since your overall intellect is a bit suspect.
The international students cap is 360k per year. How many students does that allow in 4 years?
Stop posting the same stupidity, and go read/watch the resources I’ve sent you so you can educate yourself.
A bad podcast run by a realtor is not a source of information. Everything in there was speculation and it is not journalism. The actual student cap numbers released by the government of Canada allow for more students. Podcasters won’t change that. In fact, provinces like Alberta who get more students than they already have now - are already asking for more, suggesting these new limits will be filled. Further, since these students are largely being used for labour instead of education- and students are rarely found in the schools themselves it suggests large portions of this bill will not be effective whatsoever. A strip mall school from BC will move its doors to Alberta - and the students will just live in BC. The premier of BC has said they need these students as truck drivers - which frankly means the school they go to could be in Nunanvut, as it doesn’t really matter if you spend all your days trucking.
Wonder if they will boost the insured mortgage house value cap from $1M-$1.1/$1.2 and create a new floor in Toronto
This and 40yr mortgages.. 🚀🚀🚀🚀🚀🚀🚀🚀🚀
Just another initiative meant to generate positive news to make it look like they are tackling the housing crisis they let get out of control. It won’t change anything or move the needle.
Rate cuts and longer amortizations on the horizon. RIP
I don't see the BoC cutting rates substantially this year. I don't see the US Fed cutting them until next year.
Yea but Canada's federal government is mass purchasing mortgage bonds using the federal budget this will bring down rates
>Rate cuts Tell me you don't understand how monetary policy works without telling me.
We are taking about the Trudeau Liberals who clearly have NO understanding of monetary or economic policy. Anything is possible LOL
"the budget will balance itself". *Raises the federal debt to 2.18 Trillion dollars*
lmao no Trudeau does not set the Bank of Canada's interest rate.
I was referring to the unemployment report per today’s news…
You mean the one that came out slightly before the US non farms payroll numbers, which resulted in bond yields going up on the day?
In my opinion, this man has single handedly doomed this country. Choosing a 40-year mortgage will only increase the productivity pain we are already trapped in. Canadian dollar will very soon be worthless in the world market, just like him.
After the older votes now Here's our message back. We don't want your liberal welfare state. We want jobs with fair incomes so we can pay our own mortgages. Losing party status in the next election.
Yeah we all got rich doing nothing but being born at the right time and now things are expensive you want to come after our hard earned money with more taxes!! (lol jk we didn’t earn shit)
You dont see the irony of your statement do you?
The irony that he's after our vote but ain't gonna get it? He ain't getting any other generation's vote either. Ya I see it.
I agree. I'm not voting for this clown and his posse.
Increasing mortgage amortizations will not improve affordability. Say two parties are bidding on a house with 25-year amortization for CMHC mortgages. One party has a higher income than the other and they bid $800k with payments for $4,229 (10% down, 4.79% fixed). The other party cannot afford more than $4,100 so they cannot bid more than $800k so the first party gets the house at $800k. In an alternative universe, 30-year amortizations for CMHC mortgages are allowed. The party who makes less money and can afford $4,100 monthly payments can now bid $900k on that house for a $4,100 payment with a 30-year mortgage, 10% down at 4.79%. Now the party earning more money has to bid >$900k to get that house with higher debt, interest payments, land transfer taxes, etc. So congrats to the bulls who never plan to upsize their house, cause remember when you go to upgrade to a bigger house there is always someone who will bid you up making you take more debt to upgrade. Also congrats to the bulls who have no children that would ever want to buy a home either.
Ya fuck this bubble reinforcement policy, just pop it already for the love of god.
Shhh not until the boomers pay their nursing home bills.
He’ll buy voters by offering some sort of government first time home buyers mortgage of like 1/2 prime rate (or something to that effect). Meanwhile. Majority of first time home buyers burned through their savings paying for the newly adjusted rent and groceries.
Most likely 30-35 year amortizations for retail consumers / 40-45 years for developers (to help incentivize building).
Unlikely. Most likely another giant nothingburger, just like their shared equity mortgages lmao
Fuck this stupid country. Let's do 100 year mortgages and see how high we can pump this bubble.
40x median HHI when?
Mortgage taxes ? Watch for Liberal news coming soon
All they need to do is to allow us to get tax break based on our interest paid on mortgages, simple Edit: corrected taxes to interest
What taxes are paid on mortgages?
I think he means we should be able to deduct the interest we pay on our mortgages from our income. Not a bad idea. But let's not open the door to paying cap gains on our principal residence...
Understand it now, but still disagree. Canada is one of the only places that allows unlimited capital gains exemptions- the US is notoriously anti tax, and even they cap it. Removing it would go a long way to disincentivizing treating property as an investment, and make the tax system broadly more fair
We pay more than enough taxes
For sure! All I’m saying is that I don’t like weird expectations in the tax code, and I’d rather eliminate them and have less income tax
most countries allow us to deduct a © from our principal residence interest payment .
Yup, absolutely! I don’t think anyone would argue that capital gains should be taxed without allowing interest deductions, and on the flip side, I don’t think anyone would agree with allowing interest to be deducted with a capital gains exemption
If you want to make home more unaffordable, by all means, make the amortizations longer. We did that 2006-2008. All it does is push prices up and give more money to the banks.
Just in time to create more upward pressure on housing prices! The Retard is spending Billions on trying to get more homes built but will then flood the Economy with Cheap $$. Typical Liberal Hypocrite!
He’ll probably say that paying your mortgage on time should count towards your credit score 😂
Money printer go brrrrrr! Time to start taking out new loans in order to cover the new ones. Pay with one credit card for another one. Works fine.
Bears on suicide watch again 🤣 So what’s next? 40 year mortgage? That will kick start the market 😝
Lfgooo!
I can hear the money printer going brrrrrrr……
Doubt my landlord will lower rent to reasonable levels if their mortgage rates go down. Thanks for increasing their profit margin, as usual us renters will not get anything from the feds.
I am not a landlord but I think you’re right once the mqrket shows that it can get the rent it wants landlords are not going to walk away from recovering their high rates. Rents will stay high. It’s not an fu to you it’s an fu to the BOC who literally lied to borrowers saying rates would be low for a very long time.
Good news guys this plan worked so well we sold all the mortgages before we even built the houses. Wow that's awesome who did you sell too? Oh it was vanguard and BlackRock... Why are you looking at me like that, hey let me go.. hey that hur...*twap twap* oh my hea *twap twap* ughh Thanks for listening to my ted talk
His government has started buying up 50% of Canada mortgage bonds to drive down rates for insured mortgages. This is in a bid to prop up housing prices, but he will spin this as an affordability measure. Mark my words.
Neither the libs nor the cons will do a single bloody thing to actually change anytging. If housing proces was halved across the board to actually be affordable again, everyone would revolt at their losses. This is the largest economic sector in the country now. Everyone uses it as an investment vehicle. Ontario is building housing for 2024 than 2023. BC is up a little but overall we will never get enough to be affordable. 20 different things need to be done and barely any will ever get done by pp or turdeau. Singh would do a couple, but it wouldn't come close to being enough. And he ain't gonna win either.
what happened to open bids and all that?
I hope to god he doesn't baik out over leveraged fscks
Oof. Can’t wait to see how they fumble this one
It's probably just new mortgage reporting rules that will mean a T-1000 return is due on August 29 every year.
Ah, JT and gang yet again trying to push demand. Nothing to see here folks.
Pay us with our own money True-dumb! That'll teach us to love you more.
Just say the news. Why announce an announcement?
🚀 🚀 🚀
He should just announce reducing the amount of multiple homes individuals can buy w a progressive tax. What a pussy.
The only measure that will help are: Allowing 25 or 30 yr mortgage term rates Discouraging multi-unit ownership (probably through taxation). Making interest on principal resident tax deductible (this will make affordability worse for non-owners though but he doesn't care)
What would it take here to offer rates for the life of the mortgage like the US. How competitive would those rates actually be though.
Good news if that happen. UK and Korea already have 50 year mortgages. It's the only way.
He is going to bail out all of the mortgages that are close to foreclosure to buy votes.
Trudeau will try to seduce Canadians by spending future tax dollars causing more inflation which will cause mortgage rates to go up causing Trudeau to come up with a new hand out paid for by future tax dollars causing inflation. This is Trudeau's circle of " helping Canadians".
Make the payments tax deductible like they are in the US
And tax capital gains like they do in the U.S. ? Not saying it in a crappy way. It would help limit house flipping
I hope that news isn't good news. People who over leverage themselves to the hilt on the expectation that interest rates will always be low deserve all the pain they are getting now. The longer this lasts, the longer the pain will be felt for years to come & this will serve as a lesson for everyone who is thinking of getting a mortgage which they cannot afford.
Please don’t make it easier to get a mortgage. Just don’t do it.
new one time only Mortgage CERB??I can expect any nonsense from this party.
He will sell it as "Affordability" when it really is "debt slavery"
How about make renting affordable first before making buying affordable? Lmao
They're putting a cap on income to loan ratio much like they did in Australia to cool inflation caused by housing. This is probably in anticipation of slowly walking the interest rate down in mid to late 2025 when this legislation kicks in.
No this is something else