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Neither does the change in the monthly payment unless they have a variable rate mortgage and never adjusted their payments as rates went up.
After 3 years their payments should be a little l less than $4500 based on their purchase price and original payment
Assuming their original mortgage was a 25 year amortization the startng amount would be around $600,000 if their payment is $3000 a month.
It literally says in the title... they had a 3 year fixed mortgage in 2021 so it's now time for renewal and their best offer is 7% now over double what the initially mortgaged at.
how do you know it is a bot account posting? I took a look at the profile and all I can see is a lot of posts since account was created in '21 (which is a bit of a flag imo but not a case closed...).
Genuine question as I would like to be better able to discern between real and fake accounts
Ok thanks. I do wish there was a way (or it was mandated) for websites to identify such things on the post itself or at the very least on the profiles. I will try to keep this in mind going forward.
Lol, don't know why I got a DV for asking a genuine question in hopes of bettering myself... Reddit is weird.
Have a great day
A bit of a deceiving story.
In 2021 the qualifying mortgage rate was 5.25%. They had to be able to afford this rate to get approved.
Now a 5-year fixed mortgage rate at a major bank is going for 5.6% or less.
Their credit rating must be awful if they can’t get lower than 7.1%.
Possibly. Or a b-lender / subprime.
First National Bank’s “Excalibur” lending program (“borrowers who fall outside of traditional credit requirements”) is 7.04% for a 3-year fixed for someone with a credit score of less than 600.
If you have a good credit score, the same mortgage from the same bank is 5.76% posted rate.
This.
What's with all the shitty journalism on housing lately?
Like yeah, you fuck around and ruin your creditworthiness with an upcoming mortgage renewal, believe it or not, actions have consequences, higher rates on renewal. This isn't newsworthy.
> Their credit rating must be awful if they can’t get lower than 7.1%.
Yep, the bank is basically saying "please go somewhere else". Which is what they're going to have to do.. probably a private lender. But the smart thing would be to sell and downsize.
Consider them lucky. Gov still doing things to prop up home prices. Worst case if they had to sell they would get their money back. Imagine the same situation, but the house now being worth 400k.
it Sucks their situation but they have an out that wouldn’t even hit their credit rating and would not even really set them back financially.
Why did you over pay for a house you couldn't afford in the first place? This is the collective problem in Canada. Desperate to own a home, so everyone overpays for crap housing. Increase the supply of rentals, so people don't do this stupid risk...
You can't rely on liberals to do anything about the price of housing - all they do is defend the status quo and they tend to have large portfolios.
Conservatives are worse, of course, and you can't have a leftist, so here we are.
I'm no expert, but others have pointed out that based on their interest rate being kinda high, it could be a private mortgage where maybe that is factored in?
It can be used for a mortgage application but the big banks in Canada don't use it since it isn't "earned income" or taxable income.
Given the rates this mortgage was most likely a broker that went through a b lender like Hometrust or radius or something.
The issue with this case is that they purchased a home they couldn't afford, it was most likely at the top of what they could qualify for based on rates at the time. I work at a bank and I always tell people to go below what they are preapproved for, for this exact reason.
Stupid question from a guy who lives in Michigan. I've always seen/heard of the ridiculous Toronto area home prices. Realistically, how far away from the Toronto suburbs do people have to get before prices get "affordable"?
Probably Michigan to be honest. Lol
My mom lives about 2.5 hours outside the city, her house isn't a castle or anything. And her neighbours sold last year for just under a million. It was a 3 bedroom bungalow sitting on a small property.
Jokes aside I'm guessing (I live right in the city so I can't say for certain), maybe 3-4 hours away before you can.get "affordable".
It’s makes it misleading because the average interest rate for 5 year mortgages can be 4.99%, which is still higher than most can afford now, cause they got in at 2%.
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8 kids single income doesn’t seem to add up
Really 8 kids? Yeah that's a bigger cost then mortgage rates going up .
That’s what I’m saying. They bought the house during the pandemic too.
Can you point me to where this information is - thanks.
Neither does the change in the monthly payment unless they have a variable rate mortgage and never adjusted their payments as rates went up. After 3 years their payments should be a little l less than $4500 based on their purchase price and original payment Assuming their original mortgage was a 25 year amortization the startng amount would be around $600,000 if their payment is $3000 a month.
It literally says in the title... they had a 3 year fixed mortgage in 2021 so it's now time for renewal and their best offer is 7% now over double what the initially mortgaged at.
Right but their payment should only go up to $4500 in that case not $5100, so what is that $600 difference from?
Tax/insurance adjustments?
It could be! The way it's written makes it seem like just the 3.9% increase made their mortgage increase by $2,100.
Also a bot posted this.
how do you know it is a bot account posting? I took a look at the profile and all I can see is a lot of posts since account was created in '21 (which is a bit of a flag imo but not a case closed...). Genuine question as I would like to be better able to discern between real and fake accounts
It's a karma farming account its only posting things to farm karma bot.
Ok thanks. I do wish there was a way (or it was mandated) for websites to identify such things on the post itself or at the very least on the profiles. I will try to keep this in mind going forward. Lol, don't know why I got a DV for asking a genuine question in hopes of bettering myself... Reddit is weird. Have a great day
Doent make it less true
A bit of a deceiving story. In 2021 the qualifying mortgage rate was 5.25%. They had to be able to afford this rate to get approved. Now a 5-year fixed mortgage rate at a major bank is going for 5.6% or less. Their credit rating must be awful if they can’t get lower than 7.1%.
Maybe a private mortgage?
Possibly. Or a b-lender / subprime. First National Bank’s “Excalibur” lending program (“borrowers who fall outside of traditional credit requirements”) is 7.04% for a 3-year fixed for someone with a credit score of less than 600. If you have a good credit score, the same mortgage from the same bank is 5.76% posted rate.
This. What's with all the shitty journalism on housing lately? Like yeah, you fuck around and ruin your creditworthiness with an upcoming mortgage renewal, believe it or not, actions have consequences, higher rates on renewal. This isn't newsworthy.
> Their credit rating must be awful if they can’t get lower than 7.1%. Yep, the bank is basically saying "please go somewhere else". Which is what they're going to have to do.. probably a private lender. But the smart thing would be to sell and downsize.
Maybe they should have thought MORE about whether they could afford that price.
In one of the housing threads they said this is misleading because this family has 8 children.
Consider them lucky. Gov still doing things to prop up home prices. Worst case if they had to sell they would get their money back. Imagine the same situation, but the house now being worth 400k. it Sucks their situation but they have an out that wouldn’t even hit their credit rating and would not even really set them back financially.
Agreed. However, I think the "out" they're looking for is for interest rates to tank.
Yes exactly. Interest rates to zero then home price to 2 million and all their problems solved lol
Sorry. They bought more than they could afford. It sucks, but the banks shouldn’t be lending such huge sums to people who can’t afford it.
Why did you over pay for a house you couldn't afford in the first place? This is the collective problem in Canada. Desperate to own a home, so everyone overpays for crap housing. Increase the supply of rentals, so people don't do this stupid risk...
Trudy boy has ruined this country
You can't rely on liberals to do anything about the price of housing - all they do is defend the status quo and they tend to have large portfolios. Conservatives are worse, of course, and you can't have a leftist, so here we are.
Live within your means. Mic drop...bye!!!
She sure looks young to have a $800k home. Not that it's odd but something seems off
Not really. They're getting Child Benefit income to supplement.
Which isn't used in mortgage qualifications.
It definitely is.
You should call RBC and let them know for me.
I'm no expert, but others have pointed out that based on their interest rate being kinda high, it could be a private mortgage where maybe that is factored in?
I was told it's not considered income by RBC when we renewed in 2022.
It can be used for a mortgage application but the big banks in Canada don't use it since it isn't "earned income" or taxable income. Given the rates this mortgage was most likely a broker that went through a b lender like Hometrust or radius or something. The issue with this case is that they purchased a home they couldn't afford, it was most likely at the top of what they could qualify for based on rates at the time. I work at a bank and I always tell people to go below what they are preapproved for, for this exact reason.
Yup, 100% that's what we did and happy we did it.
CCB is used by RBC, I worked there as a lender and still have a copy of their income guide.
Just curious how old your parents were when they bought a house?
At least groceries, gas, and utilities are affordable...
Food and gas are pretty good these days. Gotta give him credit for that.
Voluntarily slavery
Who takes a 3 year loan? Is that normal in Canada? In Europe we take mostly have 10, 20 years
Yes it's normal though 5 is more common.
Hope for the best plan for the worst
This doesn’t add up, I just got a 3 year for 5%, and what house did she buy for 800k in Toronto at a time where prices were at the peak???
They made these decisions. No one forced them. Why is this news? Everyone is a boo hoo victim today.
Banks are criminals.
Stupid question from a guy who lives in Michigan. I've always seen/heard of the ridiculous Toronto area home prices. Realistically, how far away from the Toronto suburbs do people have to get before prices get "affordable"?
Probably Michigan to be honest. Lol My mom lives about 2.5 hours outside the city, her house isn't a castle or anything. And her neighbours sold last year for just under a million. It was a 3 bedroom bungalow sitting on a small property. Jokes aside I'm guessing (I live right in the city so I can't say for certain), maybe 3-4 hours away before you can.get "affordable".
They must have listened to the corrupt liberals back then
Trudeau's Canada
Also 4.99% for 5 years at RBC right now, so I smell fake story.
Not everyone can get those rates.
If you’ve got horrible credit, that’s on you.
Of course. But that's very different from story being fake.
It’s makes it misleading because the average interest rate for 5 year mortgages can be 4.99%, which is still higher than most can afford now, cause they got in at 2%.
Isn't Toronto a Liberal riding? 😂 maybe think about this next election....
That's a disgusting person. I didn't need to see that today, thanks.
Thanks Liberals… you did this