Agreed with the rate drop trend started, i do see the spring of 2025 busier and potentially 2026 hot. Note that 0.25% of 100K is $250 which is about $20 per month of less interest payments.
Great assessment! I agree with you on the 2025 and 2026 years that will bring back a huge resurgence if rates continue to drop over the next 2 years. In terms of the calculations it is not a straight across the board calculation as the numbers don't work 1:1. There are things to keep in mind such as your amortization on your mortgage if it is based on a 25 year or 30 year mortgage and the calculation I used was the most conservative. Brokers will state that for every $100,000 the savings are between $13-$15/month on your mortgage. Are you in the Vancouver market?
I work the Vancouver market and many people here have mortgages that represent millions of dollar, it is a lot more than a free tank of gas. Around the country in smaller markets I agree the relief is minimal but that is why in the title it is directed to Vancouver home owners. Are you living in the Vancouver area?
@@iamkylemark For an healty household budjet, 35% of the disposible income should go on the mortgage payment, If that principle was applied in 2022 then a couple should have a disposable income of 290 000$ of combined salaries for a 2M $ mortgage at a variable rate of 2%. Now that the variable rate is at 6.9% then with the same disposable income then the mortgage payment represent 57% of that income so almost twice of what is considered an healty budjet.
@@comptegoogle511 I 100% completely agree with you on those facts. Unfortunately when you live in a market like Vancouver where the median salary is very low in comparison to the housing prices, home owners are tipping into that 50% number instead of that 35% number for disposable income going towards housing. The same goes to the rental market as well, there are very few people who live here in Vancouver that can boast that they can adhere to those ratios.
@@iamkylemark Now for those who already put 50% of their disposable income on a mortgage at 2% in 2022 what's the percentage now that the that the rate is at 6,9%... I't's not going to end well!!!
@@comptegoogle511 I totally agree and that is why there are many people facing defaults and foreclosures right now. As a buyer there are opportunities in the market place with a surge in inventory and sellers being stuck in precarious financial positions.
Hey Kristina the prices in Vancouver are extremely high I agree with you on that. I don't necessarily agree they are a rip off as Vancouver properties hold their value well and are great assets to hold. There are other projects that are cheaper if that is something you are interested in shoot me a email kyle@kylemark.ca!
Due to the fact that Vancouver cannot build out like other cities such as Calgary, Edmonton and Toronto is why the property values stay high. With the Pacific Ocean, North Shore Mountains and the US border, not to mention 22 protected view corridors Vancouver has no more capacity to build more and higher to increase density.
Rate cuts means you stay at the same mortgage payment you have now & you only pay interest & no principal. In some cases, with the lower rate, your payments will go higher!
I have never heard or seen that a drop in rates will result in higher payments, that doesn’t make any sense. Keep in mind the Bank of Canada rate decrease o my applies to variable mortgages, it has no bearing on fixed rates as discussed in the video. Variable rate holders are saving between $13-$15 per $100,000 of lending on a traditional variable product.
@iamkylemark this is coming from my friend the just renewed at a lower rate & was told they have to stay at the same payment with reduced principal. It's not getting better its getting worse, & now they say the banks will start giving 50 year mortgages in Canada.
there were some homeowners that decided to move forward with a trigger rate variable product. What that meant was that their rate would not change and they would just be making interest only payments. What this did was add amortization on the back end of their mortgage and it would then be problematic for those homeowners when it came time to renew because of the way they added years to their mortgage. I agree it is not great here but a lot of homeowners leverage themselves at historic low interest rates which was not good financial planning. There was only one way rates would go and that was up so leveraging yourself at a time of historic lows has put a lot of people in financial hardship. It is always so crucial to align with a realtor and a mortgage broker who strategies a plan outside of just buying a home and going over all scenarios in a best case and worst case scenario. Hopefully your friends property has appreciated over that timeline. If they renewed their mortgage after a 5 year period they should be sitting on some good appreciation. Thanks for the explanation and your perspective it’s certainly realtor a lot of people. I also am feeling the pinch but was super happy that they dropped rates as it has saved my family money. I told all of my clients not to get into a trigger rate scenario with their mortgage, also sometimes it’s better to rent than just buy a home and be leveraged.
I agree we need more but it is a start. You can see from the graph in the video that the average drop of rates totals 2.35% over the course of 2 years so the relief is coming. I know that many people are very happy, it is much better than the BOC holding rates for a couple of months. At least it is providing some relief. Are you currently living in the Vancouver area?
It is the first BOC rate drop in 4 years. The BOC averages 2.35% in total drops over the last few cycles that have occurred. For those in Vancouver it is saving them hundreds of dollars a month and it will cascade into much more savings over the course of the year. This is good news and thanks for tuning in!
Agreed with the rate drop trend started, i do see the spring of 2025 busier and potentially 2026 hot. Note that 0.25% of 100K is $250 which is about $20 per month of less interest payments.
Great assessment! I agree with you on the 2025 and 2026 years that will bring back a huge resurgence if rates continue to drop over the next 2 years. In terms of the calculations it is not a straight across the board calculation as the numbers don't work 1:1. There are things to keep in mind such as your amortization on your mortgage if it is based on a 25 year or 30 year mortgage and the calculation I used was the most conservative. Brokers will state that for every $100,000 the savings are between $13-$15/month on your mortgage. Are you in the Vancouver market?
That relief represent a free tank of gas per month on o 500k mortgage.
I work the Vancouver market and many people here have mortgages that represent millions of dollar, it is a lot more than a free tank of gas. Around the country in smaller markets I agree the relief is minimal but that is why in the title it is directed to Vancouver home owners. Are you living in the Vancouver area?
@@iamkylemark For an healty household budjet, 35% of the disposible income should go on the mortgage payment, If that principle was applied in 2022 then a couple should have a disposable income of 290 000$ of combined salaries for a 2M $ mortgage at a variable rate of 2%. Now that the variable rate is at 6.9% then with the same disposable income then the mortgage payment represent 57% of that income so almost twice of what is considered an healty budjet.
@@comptegoogle511 I 100% completely agree with you on those facts. Unfortunately when you live in a market like Vancouver where the median salary is very low in comparison to the housing prices, home owners are tipping into that 50% number instead of that 35% number for disposable income going towards housing. The same goes to the rental market as well, there are very few people who live here in Vancouver that can boast that they can adhere to those ratios.
@@iamkylemark Now for those who already put 50% of their disposable income on a mortgage at 2% in 2022 what's the percentage now that the that the rate is at 6,9%... I't's not going to end well!!!
@@comptegoogle511 I totally agree and that is why there are many people facing defaults and foreclosures right now. As a buyer there are opportunities in the market place with a surge in inventory and sellers being stuck in precarious financial positions.
Still housing prices are pure ripping off
Hey Kristina the prices in Vancouver are extremely high I agree with you on that. I don't necessarily agree they are a rip off as Vancouver properties hold their value well and are great assets to hold. There are other projects that are cheaper if that is something you are interested in shoot me a email kyle@kylemark.ca!
@@iamkylemarkVanncouver properties holding investment values thanks money londering not production based economy
Due to the fact that Vancouver cannot build out like other cities such as Calgary, Edmonton and Toronto is why the property values stay high. With the Pacific Ocean, North Shore Mountains and the US border, not to mention 22 protected view corridors Vancouver has no more capacity to build more and higher to increase density.
Rate cuts means you stay at the same mortgage payment you have now & you only pay interest & no principal. In some cases, with the lower rate, your payments will go higher!
I have never heard or seen that a drop in rates will result in higher payments, that doesn’t make any sense. Keep in mind the Bank of Canada rate decrease o my applies to variable mortgages, it has no bearing on fixed rates as discussed in the video. Variable rate holders are saving between $13-$15 per $100,000 of lending on a traditional variable product.
@iamkylemark this is coming from my friend the just renewed at a lower rate & was told they have to stay at the same payment with reduced principal. It's not getting better its getting worse, & now they say the banks will start giving 50 year mortgages in Canada.
there were some homeowners that decided to move forward with a trigger rate variable product. What that meant was that their rate would not change and they would just be making interest only payments. What this did was add amortization on the back end of their mortgage and it would then be problematic for those homeowners when it came time to renew because of the way they added years to their mortgage. I agree it is not great here but a lot of homeowners leverage themselves at historic low interest rates which was not good financial planning. There was only one way rates would go and that was up so leveraging yourself at a time of historic lows has put a lot of people in financial hardship. It is always so crucial to align with a realtor and a mortgage broker who strategies a plan outside of just buying a home and going over all scenarios in a best case and worst case scenario. Hopefully your friends property has appreciated over that timeline. If they renewed their mortgage after a 5 year period they should be sitting on some good appreciation. Thanks for the explanation and your perspective it’s certainly realtor a lot of people. I also am feeling the pinch but was super happy that they dropped rates as it has saved my family money. I told all of my clients not to get into a trigger rate scenario with their mortgage, also sometimes it’s better to rent than just buy a home and be leveraged.
@@iamkylemark theoretically they would also affect fixed rates upon renewals though, although the bond market is stopping that from happening atm.
Massive no,, its not really going to Help, sorry need way way more..
I agree we need more but it is a start. You can see from the graph in the video that the average drop of rates totals 2.35% over the course of 2 years so the relief is coming. I know that many people are very happy, it is much better than the BOC holding rates for a couple of months. At least it is providing some relief. Are you currently living in the Vancouver area?
Massive,, more click bait of course.
It is the first BOC rate drop in 4 years. The BOC averages 2.35% in total drops over the last few cycles that have occurred. For those in Vancouver it is saving them hundreds of dollars a month and it will cascade into much more savings over the course of the year. This is good news and thanks for tuning in!