Fixed Mortgage Rate Or Variable Mortgage Rate? The Debate Goes Red Hot Today

As Canada accepts the idea our economy really is tanking & the Bank of Canada must cut rates this year the eternal question of Fixed or Variable is front & centre

What's the answer?

2/ Some of it is situational

If people are positive they will sell there house in a finite time horizon like 12 - 18 months take Variable

Guaranteed to only be a 3 - Month Interest penalty & on a short term basis 100% sure the rate will go down at least 50 BPS

Easy call

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Canadian Jobs Report A Disaster: What does It Mean For Bank Of Canada's Rate Decision?

66K Jobs Lost in Canada, over 100K in the last 2 months

Horrible outcome for all those families

Windsor Ontario hit & Alberta feeling the pain as energy prices slide

A country in pain

2/ Bank of Canada Decision on September 17th

Odds of a cut jump to 70%

Canada Bond Yields fell immediately so Traders sure believe in a cut

Will it happen?

Whether it's the 17th or not isn't the key issue

The key is cuts are now locked in

Whether its September or October

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Prime Minister Carney Please STOP Build Canada Homes: Cancel It NOW

Because this program is going to be a colossal failure & light Billions of Taxpayer's dollars on fire

You need to cancel it for many reasons but perhaps the most important is: it's just about Rentals

2/ Let's break it down:

- The entire discussion about Build Canada Homes has been about Affordable Housing: these are code words for Rentals & Subsidized Housing.
- We do NOT need a whole new Bureaucracy built to encourage Rentals: CMHC's Rental Program has already worked

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Federal Housing Minister Robertson Discovers Toronto Condo Market In Free Fall: Only 2 Years Too Late

It's always wild when Government realizes something everybody else knew for years

When the Immigration Minister noticed 3 Million New Canadians showed up in 2.5 years

2/ Wow, that may be too many

Or after 6 years of the Carbon Tax as the most hated thing in Canada & creating it's own inflation: Mark Carney shows up one day & says: this Carbon Tax has to go

The most hellacious thing about modern government is mind bending incompetence

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What They Call Mortgage Fraud In The USA Is Just A Normal Transaction In Canada

It just got a Federal Reserve Governor fired yesterday

It's called a False Primary Residence Declaration & in the USA it's a crime that can come with jail time

In Canada it's accepted practice

2/ This is whether the house being mortgaged is a primary residence, a secondary residence or a rental

Owner Occupied: Best Mortgage Rate

Secondary Residence (Cottage): Not as good Mortgage Rate

Rental: Significantly higher Mortgage Rate

In the USA you MUST be truthful

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Canada To Become A Nation Of Renters? The Truth Behind CMHC Housing Start Numbers

CMHC announces an adjustment UP in New Housing Starts this year to 294K

Ontario continues to be a disaster, Starts are down 68% from previous years

Where are the Starts & what are they?

2/ Quebec, Alberta, Prairies & Atlantic are all up, Quebec & Saskatchewan in particular are busy. BC still slow

What's getting built?

RENTALS are getting built in massive numbers

Starts for Houses for people to BUY is in a disastrous state, one of the lowest numbers ever

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Housing Crisis? What Housing Crisis? CMHC Announces Rental GLUT: So Many Rentals By 2026 They Will Stay Empty

Peak Insanity

Let's break this down

Condo Crashes in Toronto & Vancouver means there are many thousands of Condos that can't be sold

And more are completing!

2/ In the next 18 months there will be at least 40K more completed (mostly Dog Crates) that are so small they are only suitable for Rental

Meantime for the last 7 years CMHC's very good plan to encourage Purpose Built Rentals becomes a massive success story

With an added twist

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Why Recent The First Nations Land Ownership Court Decision In BC Is Totally NUTS

After a 5 Year Trial (longest in Canadian history) 800 acres in the City Of Richmond Hill BC was awarded to the Cowichan Tribes ending 200 years of accepted property law in Canada

2/ At the stroke of a pen a fuckwit Judge negated one of the most important aspects of law in a free society: property rights

If a court can decide a First Nations claim supersedes existing muti decade property titles this country is in more trouble than I thought

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Lousy Jobs Report Could Signal Future Bank Of Canada Rate Cuts

The concept that the Bank of Canada was finished cutting rates took at hit today with the report of 41K job losses (51K Full Time Jobs) Canada wide

Don't expect a cut at the September 17th announcement

2/ But if there are 2 more lousy jobs reports the October or December BoC announcements will likely bring a cut

That's particularly true if Canadian GDP shrinks as well

What to think about the future of mortgage rates?

Right now is an incredibly hard time for predictions

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Developers Want Foreign Buyers To Be Allowed To Buy Pre-Construction Condos Again

Because years ago Chinese buyers would fly in to Vancouver buy a dozen Pre-Con Condos & fly back

Similar story for Pre-Con Buyers from other nations

This was a huge benefit for Developers

2/ Imagine the ability to sell out a 300 unit proposes Development in a few days because Buyers ALL bought multiple units

You didn't need 300 Buyers you only need 75 or 80

It was incredibly efficient & effective

Which brings us to the basis of building a Condo Tower

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I Used To Think "You Will Own Nothing & Be Happy" Was A Dumb Slogan: Not So Sure Anymore.....

Because in Canada & other countries in the world Homeownership has become very difficult for young people without parental assistance or top 10% Income levels

And that's wrong

2/ Only 20 years ago house prices in Canada allowed the bulk of couples in their 30's to own a home of their own based on 5% Down Payment & their personal incomes

Not anymore

Everyone understands that house prices are down from their insane highs in March 2022

But not enough

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3 Million Immigrants In 3 Years Was The Worst Government Policy Mistake Of The Last 50 Years

We'll need more than 1 year of zero population growth to reverse this hellacious error

It's just math, screwing up the world's best Immigration system will take time to correct

2/ Let's put 3 Million new people in 3 Years into perspective

Imagine 28 Million new people coming into the United States LEGALLY

Roll that around in your head a moment

It's fair to say America would have have been in armed revolt at around 16 Million

Yeah, that serious

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In Ontario House Prices Only Go Up...... Welcome To 2025 Reality Prices Go DOWN

So many stories of homes selling below their 2020, 2021 & 2022 purchase price it's front page of the Business Section in @TorontoStar now

People watching Canadian Real Estate on X knew this

2/ Likely knew it 15 months ago

Let's put the 416 Condo Crash aside because that's a universal thing now & will just get worse next year

What about Low-Rise in other parts of the GTA and Ontario

Its regional

Let's start in Cottage Country: Sales have totally collapsed

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Is It Getting To Be A Good Time To Buy A House? Because We Are Starting To Hear That Alot

RBC published a study suggesting the best Housing "affordability" in 3 years

Real Estate analysts point out Homes in expensive markets are down in price

And it's true, prices are down

2/ But in some regions prices are down from a peak price moment that was the highest in the history of Canada

Some house prices went up 30% in 2021

Are prices down from Peak Crazy: Yes

The bizarre nexus of 1.69% Mortgage Rates & Batshit Crazy FOMO

Yeah, down from there

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Microsoft Terminates Another 10K Employees Will AI Decimate White Collar Jobs?

Yeah, it will

Why does a MortgageGuy keep posting about this?

Because Unemployment is the by far the biggest influence on Mortgage Default

And Canada has EXTRA trouble on this issue

2/ Because unlike the USA who is on a mission to restore Blue Collar Manufacturing Jobs through Trump's Tariff program Canada is watching Manufacturing Jobs dissappear

If the USA is determined to destroy Canada's Manufacturing capacity & AI is set to gut White Collar Jobs

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Bank Blanket Appraisal On New Construction Condo Says It's Worth The 2020 Purchase Price: Every Other Appraisal Says Its Worth 25% To 30% LESS

WTF is going on here?

Let me explain how this stuff works

Hi-Rise Condos take 4 to 6 years to build

Today that's a problem

2/ Because in 2020 some people bought Dog Crate Condos at insane prices, also in 2021 & part of 2022

550 sqft Condos for around $1M, it was a crazy price even back then but now thousands of those sized units are being offered for at $675K - $700K

But it's a firm contract

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AI Will Destroy Jobs: It's Coming Faster Than I Thought

As an old guy I am wrong person to comment on AI but I just encountered it in Mortgage Brokerage role that knocked me over

In the mortgage business we talk to people

Pure Digital Mortgages are just 4% of originations

2/ Only Licensed Mortgage Brokers can discuss rates, terms & mortgage products with the public but others can schedule calls, request documents, & deal with service calls

For the last year our company has been shown AI models to address these functions

They were OK but clumsy

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Single Family Real Estate: Heartbreak & Losses Or Will It Snap Back Quickly?

In Ontario & BC we understand the Condo Crash but what's happening with Detached, Semi's & Towns?

In some regions very bad news but what's the final outcome?

Let's be clear: other places are fine

2/ Quebec Real Estate good: sales up prices up, Alberta steady, some slight cracks on pricing emerging but nothing serious

Atlantic fine, Saskatchewan busy, Manitoba fine

But Ontario & BC: Ultra-Slow Sales volume & prices starting to sag

Old sins are coming to the surface

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First Time Home Buyers Getting Older & Guess What: Need Parents Help!

CMHC Reports confirm something we knew: in BC & Ontario, even older, higher income FTHBs often need Parental Help

The Feudal System is COMING BACK

The Medieval System of land rich families is reborn

2/ People talk about Boomer wealth transfer, it's happening before our eyes, even Gen X parents helping their kids with Down Payment Gifts

Or in a more dangerous move: Co-signers on Mortgages

Does Canada want to return to this Feudal System?

Doesn't matter, it's happening

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Blow-Ups Happen! We Enter The Phase Where Homeowners Are Forced To Sell

Don't get me wrong: its not a wave

But our company would typically speak to borrowers who HAD to sell their homes based on inability to pay 3 or 4 times a year

There were of these 4 just in May

2/ It's strictly anecdotal but it's factual 4 homes that have to be sold

First or Second Mortgage in 30, 60 & in one case 90 day default

One not in arrears but scared enough of it happening soon, list the house now

Is there a common thread with these situations?

Employment

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Homeowners Filing For Bankruptcy: Something That Never Happened For 14 Years Is Now Normal

Since 2008 Homeowners represented less than 5% of Bankruptcies in Ontario, some years less than 2%

Homeowners did have financial problems but they solved them without a Trustee

2/ Homeowners didn't need assistance from an Insolvency Trustee due to the endless increase in the values of their homes

Getting behind on Credit Cards? - Get a Heloc
Big Debt Problems? - Refinance your House
Job Losses, Can't pay the Mortgage? Sell the house & have $350K cash

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