Ozincan

We are new to the country but rates are very low now. We just bought, and will need a mortgage of around 600-700k. We might come into some inheritance money, about 200k..Just wondering whether you would throw 'all you have' on to a mortgage or withhold funds and invest it.

We are going to go with a variable mortgage.
Given the very low mortgage rates, we've been told it might be smarter to invest the other money.

Opinions?

dbd33

I know nothing about investing but have to say that the idea of a mortgage for 600-700k made my stomach flutter. I wouldn't have had the balls for that when I was making a consistent $250k.

Howefamily

Just tied into a fixed 2.59% for 5 years, got it down to 15 years too - oh happy days

Former Lancastrian

I too know little about investing but be careful.
Mortgage rates are low but how many times have we heard its just a matter of time before they increase.
So say you carry a mortgage of X amount at X% variable you will have X amount to pay. Now the rates go up by X% how will that affect your payment. They say many are maxed to the limit and even a 1% increase in the rates will force many of these to default on payments.
With low mortgage rates you are also seeing very low interest rates for guaranteed returns.
Go see a financial advisor and talk over your options and then when they say invest X amount in this portfolio for X% of a return ask them to guarantee that rate in writing and if they won't ask why.
I saw my exes investments reduced by over 50% during the last crash and of course all these financial experts predicted the oil prices dropping through the floor.
How long do you want your money tied up for?

withabix

The lenders are Qualifying people for affordability at their headline rates and not the very low rates that they lend at.

So, Scotiabank are using 4.49% for affordability calculations for a 5-year fix, but lending at 2.79% (or slightly lower right now through the broker market).

If they calculate you can't afford 4.49%, you won't get a 2.79% mortgage.

That should provide some affordability buffer coming out the other end of the fixed rate period, providing people don't just go and swap all of their equity for a truck, boat, RV, boob job and a line of credit in the mean time...

Aviator

It has been like that since we came to Canada, and in 20 years there has been speculation of rates going up.

I'd welcome the rates of the 80s myself, 15% would be a dream! Not sure my kids would be quite so gleeful though.

Tirytory

Our accountant was suggesting we buy some waterfront property and watch it appreciate over 10 years, and the bank will lend the 6/7 figures needed but it's absolutely bonkers... How does anyone sleep at night or enjoy it with that level of risk?

We come in at over 60% lower than what we could have and I still think we pay too much

Op honestly I would rather have the security of having a reduced mortgage and/or buy an investment property to rent out? We do this albeit back in the U.K. Once we're finally settled (someone's offered to buy our house and allow us to move into town) that's what I want to do here...

Ozincan

It makes mine flutter too, and we unfortunately listened to the agent so .. Anyway it's hard to get a house in Vancouver for less..our income is not even half of what you had. I guess this is why they say Canadians are in trouble with debt..

Ozincan

Haven't been able to locate a good financial advisor but will look into this, thanks for the advice

Ozincan

Yes not sure whether it's reducing the mortgage OR buying an investment property...

Good luck with the sale and repurchase!

Ozincan

Congrats, are you still amortizing at 30 years?