FranLab is getting evicted

[Nusa]

Franky I'm of the opinion that most of our problems could be solved by having fewer people. The earth is not getting any larger, there is no new land left to discover, and most people desire to live in a small handful of particularly nice areas. Resources are also limited and the more people there are, the thinner the resources get spread. If the population stopped growing housing would catch up.

Oh, don't worry...population will certainly decrease when the environmental situation really hits the fan.  I suspect a significant fraction of the world population will be lost in the next 100 years.

In 100 years, 99.99% of those alive today will be dead, unless we get a lot better at living past age 100. So you are probably correct.

[EEVblog]

If someone can't hold complex advice in their head, or if any spare money is likely to turn into cars, big TVs, and vacations, paying down the mortgage early is fantastic advice. If someone has a fixed rate mortgage at around half the risk-free rate, the optimal advice becomes more nuanced.

Indeed. If you locked in one of those insanely low fixed 30 year rates, it's a different equation.
We don't have that here in Australia, 2-3 years fixed is most common, 5 years tops. No such thing as a 20-30yr fixed rate. I advised everyone on Twitter to lock in a home loan rate at 2% early in the year. I hope some took my advice.

[Alex Eisenhut]

I advised everyone on Twitter to lock in a home loan rate at 2% early in the year. I hope some took my advice.

Oh yeah. I don't even like my place but I locked in earlier this year, while I am biding my time ...

I am eagerly awaiting a correction so that a tiny 70 year old hovel that hasn't been renovated since the Nixon Administration doesn't cost close to 400K$ (CDN but still)

[Quarlo Klobrigney]

And never pay off the note early as "They" don't like that because they miss out on the grift that they will make off you in you lifetime, not to mention hoping they can repossess you with foreclosure into the street.
It's all a big banker scam. They gave loans to people who they knew could never qualify. Next, pump and dump, wash and repeat. Circa 2008 reset.

[Bud]

If "they" do not want you to pay the principal earlier that would be in the mortgage paper as early payment penalties. If there is no such provision in your mortgage than you can pay as fast as you want/can. One should be aware of this when getting a mortgage.

[tom66]

Indeed. If you locked in one of those insanely low fixed 30 year rates, it's a different equation.
We don't have that here in Australia, 2-3 years fixed is most common, 5 years tops. No such thing as a 20-30yr fixed rate. I advised everyone on Twitter to lock in a home loan rate at 2% early in the year. I hope some took my advice.

Seems like a similar arrangement to the UK, most of our mortgages are ARMs.

This has caught some people out, a family member with a very expensive house looking at going from 1.6% to 6.4% next year.

I would love to secure  30 year loan at 3.2% like the Americans seem to manage (though I understand new rates are closer to 5-6%).  But all the 30 year products here are 6%+.  Perhaps in the near future if bank base rates return to normal 5% or so levels -- they may look more attractive.

You can overpay typically between 10-20% of the balance per year here as well.  Anything more attracts a penalty.

Overpaying your own home loan is very sensible especially if you can become mortgage free in your mid life.  That's HUGE.

[EEVblog]

Indeed. If you locked in one of those insanely low fixed 30 year rates, it's a different equation.
We don't have that here in Australia, 2-3 years fixed is most common, 5 years tops. No such thing as a 20-30yr fixed rate. I advised everyone on Twitter to lock in a home loan rate at 2% early in the year. I hope some took my advice.

Seems like a similar arrangement to the UK, most of our mortgages are ARMs.
This has caught some people out, a family member with a very expensive house looking at going from 1.6% to 6.4% next year.

Everyone here is in the same boat progressively from right now to over the next 2-3 years. Most people do not have 5 years fixed terms, and 30 year does not exist here. I think technically a few lenders might have 10 year options, but it's basically not a thing here.

I would love to secure  30 year loan at 3.2% like the Americans seem to manage (though I understand new rates are closer to 5-6%).  But all the 30 year products here are 6%+.  Perhaps in the near future if bank base rates return to normal 5% or so levels -- they may look more attractive.

The yanks get 30 year fixed terms because their lenders are government own and backed (Freddie/Fanny) at government bond rates. No such thing here.

[sokoloff]

[The yanks get 30 year fixed terms because their lenders are government own and backed (Freddie/Fanny) at government bond rates. No such thing here.

That’s only true for “conforming loans”, not for jumbo loans (loans over about $647K).

There’s a ready appetite for purchasing jumbo loans and so the additional cost for jumbos in the US is relatively low. My loans (refinanced twice) have all been jumbos, starting at 6.5% in 2007, then re-fi’d to 4.5%, then 3.25%. I was looking to pull the trigger if it hit 2.75%, but I was always an 1/8th over that so missed out. With perfect hindsight, I should have taken the 2.875%, of course.

https://www.investopedia.com/terms/c/conformingloan.asp

[tom66]

We had an odd period in the UK mortgage market where 2, 5 and 10 year fixed terms were all priced around 3%.  (Spread of only 0.5% between them all.)  I guess we'll see if fixing at 3% for 5yr from June this year will turn out to be a good idea.  Typically a 2 year mortgage would be around 1.5% with sufficient equity; 5 years around 2.5%; and 10yrs at 3%+ going by 2018-2021 rates.  Relatively few companies offer the 10yr, and AFAIK only one or two offer beyond that up to full term mortgages.

I thought being a first time buyer with relatively low equity in the property 5yrs was financially prudent as it reduced the chance of being in an equity trap - another side effect of our mortgage fixes short being your house value had better stay up or you will end up trapped in an unfavourable rate.  Since this usually correlates with an economic downturn, it is the worst time for such effects to correlate.

[unknownparticle]

Franky I'm of the opinion that most of our problems could be solved by having fewer people. The earth is not getting any larger, there is no new land left to discover, and most people desire to live in a small handful of particularly nice areas. Resources are also limited and the more people there are, the thinner the resources get spread. If the population stopped growing housing would catch up.

Oh, don't worry...population will certainly decrease when the environmental situation really hits the fan.  I suspect a significant fraction of the world population will be lost in the next 100 years.

In 100 years, 99.99% of those alive today will be dead, unless we get a lot better at living past age 100. So you are probably correct.

Actually, most of the worlds land is unpopulated, the problem with lack of space is down to amenities outside large cities.  If there is no employment, utilities, roads, support facilities, in a given area, it cannot populate.  And the only way those issues can be addressed is through a governments political will.  Even here in the UK, a small island country, the capital, London is the place that gets all the attention. As you move out, even as close as 30-50 miles away, opportunities fall away dramatically with some areas being virtual ghost towns with high crime, drugs and alcohol abuse problems. However, because of insane property prices, fewer and fewer people can afford to live there, so if you work in London you have to commute from as far away as 100 miles!!!  Utterly crazy and a complete waste of resources that other parts of the country could provide, which would massively improve growth and prosperity. 
Also, I recall reading somewhere, that the entire world population could be accommodated in Texas, with room to spare!!  Not surprising really when great areas of land mass have no population at all, a lot of it in America, even more in Russia, Africa, South America etc, etc. Ok, some places are uninhabitable, but even here in the UK we have massive areas of land that could be developed for human habitation.  That has to be better than cities like London, New York, Tokyo, etc, that are just bursting at the seams, causing all sorts of problems. 

[sokoloff]

Also, I recall reading somewhere, that the entire world population could be accommodated in Texas, with room to spare!!

That would put the entire state of Texas at a density roughly 10% more than New York City (around 30K/mi² needed, vs around 27K/mi² for NYC).

Finding a way to feed and water all of a Texas-sized denser-than-NYC would be a challenge, of course.

[langwadt]

We had an odd period in the UK mortgage market where 2, 5 and 10 year fixed terms were all priced around 3%.  (Spread of only 0.5% between them all.)  I guess we'll see if fixing at 3% for 5yr from June this year will turn out to be a good idea.  Typically a 2 year mortgage would be around 1.5% with sufficient equity; 5 years around 2.5%; and 10yrs at 3%+ going by 2018-2021 rates.  Relatively few companies offer the 10yr, and AFAIK only one or two offer beyond that up to full term mortgages.

I thought being a first time buyer with relatively low equity in the property 5yrs was financially prudent as it reduced the chance of being in an equity trap - another side effect of our mortgage fixes short being your house value had better stay up or you will end up trapped in an unfavourable rate.  Since this usually correlates with an economic downturn, it is the worst time for such effects to correlate.

for while we had 20-30 years fixed at ~0% interest (with other fixed fees of about 1.5% )

[james_s]

Seems like a similar arrangement to the UK, most of our mortgages are ARMs.

This has caught some people out, a family member with a very expensive house looking at going from 1.6% to 6.4% next year.

I would love to secure  30 year loan at 3.2% like the Americans seem to manage (though I understand new rates are closer to 5-6%).  But all the 30 year products here are 6%+.  Perhaps in the near future if bank base rates return to normal 5% or so levels -- they may look more attractive.

That seems crazy, ARMs are known as very dangerous things that people get when they can't qualify for a fixed mortgage. I had to get an ARM when I first bought my house but the moment it appreciated enough for me to be qualified I refinanced to a 30 year fixed and again later to a 15 year fixed at 3.25%.

On the other hand, I gather the UK locks in your property tax rate which doesn't happen here, so despite having a fixed mortgage my monthly payment rises regularly as the value of my house increases and taxes follow.

[james_s]

Actually, most of the worlds land is unpopulated, the problem with lack of space is down to amenities outside large cities.  If there is no employment, utilities, roads, support facilities, in a given area, it cannot populate. 

That's a very big if. The roads in my region are clogged, often at all hours of the day, there are houses everywhere and they keep squeezing in more and it is becoming unbearable. This was a nice quiet rural area and now it's a city and I hate what it has become, I absolutely loathe urban environments and crowding, it causes me stress just thinking about being packed in with so many other people. They can't expand the roads because there is no space for it, everything is already built out. The population in this region has grown by leaps and bounds and it just keeps on growing. Personally I wish they would simply stop allowing any new housing to be built, it's full, and it's impossible to build your way out of a housing shortage. If they build more houses it simply draws in more people.

Most people want to live in nice areas that are in close proximity to jobs and nice scenery, bodies of water and such.

[james_s]

Also, I recall reading somewhere, that the entire world population could be accommodated in Texas, with room to spare!!

That would put the entire state of Texas at a density roughly 10% more than New York City (around 30K/mi² needed, vs around 27K/mi² for NYC).

Finding a way to feed and water all of a Texas-sized denser-than-NYC would be a challenge, of course.

That sounds absolutely horrid. Texas would be a third world shit hole crawling with disease and trash. You may be able to fit that many people on paper, but the real world conditions would be intolerable and I would rather be dead than to have to live in close proximity to that many people.

[Kasper]

The percent of variable rate mortgages increased a lot in Canada lately, despite very low fixed rates, variable was a bit lower and I guess they stopped teaching the story of Icarus in schools.

It is common for variable rate mortgages to have fixed payments so when bank of Canada raises interest rates and your interest payment goes up, your principal payment goes down.  Lots of people are now getting "triggered" and having a 'surprise' payment increase as the interest portion is higher than their payment and banks are mandated to make you pay at least a tiny bit into your principal.

Some people who don't qualify for traditional mortgages will go to private lenders who charge extra.  Romspen, one of Canada's largest private mortgage lenders has recently frozen investor redemptions.  Supposedly because people aren't making their mortgage payments.

[Kasper]

Actually, most of the worlds land is unpopulated, the problem with lack of space is down to amenities outside large cities.  If there is no employment, utilities, roads, support facilities, in a given area, it cannot populate. 

That's a very big if. The roads in my region are clogged, often at all hours of the day, there are houses everywhere and they keep squeezing in more and it is becoming unbearable. This was a nice quiet rural area and now it's a city and I hate what it has become, I absolutely loathe urban environments and crowding, it causes me stress just thinking about being packed in with so many other people. They can't expand the roads because there is no space for it, everything is already built out. The population in this region has grown by leaps and bounds and it just keeps on growing. Personally I wish they would simply stop allowing any new housing to be built, it's full, and it's impossible to build your way out of a housing shortage. If they build more houses it simply draws in more people.

Most people want to live in nice areas that are in close proximity to jobs and nice scenery, bodies of water and such.

I'm with you on that.  I have no idea why people pay so much extra to live in the crowded areas, all while complaining about the cost and while there are tons of great places to live near by. 

Some cities try to limit density and my province, BC is trying to remove their power to do so.  Eby’s proposed policies include legalizing secondary suites (i.e. basement apartments) across the province and allowing any single-family home to be replaced with up to three units on the same footprint.

[Bud]

This has caught some people out, a family member with a very expensive house looking at going from 1.6% to 6.4% next year.

Ooch!! 

[MikeK]

I have no idea why people pay so much extra to live in the crowded areas, all while complaining about the cost and while there are tons of great places to live near by.

"Crowded" areas are better places to live.  They are more efficient and have more things to do.  I used to live in the suburbs...It was awful.  You have to drive to *everything* and all the good stuff is far away.  I live in the city now and I walk, bike, or bus to nearly everything.  See "Not Just Bikes" video (videos?) about cities versus suburbs.  Suburbs suck money and aren't sustainable in the long term.  A long term sustainable future cannot possibly include every human having an automobile and living spread apart.

[Bud]

It is common for variable rate mortgages to have fixed payments so when bank of Canada raises interest rates and your interest payment goes up, your principal payment goes down.  Lots of people are now getting "triggered" and having a 'surprise' payment increase

Variable rate is a gamble...That is why I never took a variable rate mortgage at renewals. Fixed rate is a bit higher but in a few months you stop noticing it and you can plan your finances and have no surprises.

[Zucca]

bought my USA home in April 2021: 15years, 2.1%. 

[Kasper]

I have no idea why people pay so much extra to live in the crowded areas, all while complaining about the cost and while there are tons of great places to live near by.

"Crowded" areas are better places to live.  They are more efficient and have more things to do.  I used to live in the suburbs...It was awful.  You have to drive to *everything* and all the good stuff is far away.  I live in the city now and I walk, bike, or bus to nearly everything.  See "Not Just Bikes" video (videos?) about cities versus suburbs.  Suburbs suck money and aren't sustainable in the long term.  A long term sustainable future cannot possibly include every human having an automobile and living spread apart.

'more things to do': if you like being in crowds.  I like playing outside and there is much more of that around small to medium cities than there is in crowded cities surrounded in urban sprawl.

I live in a small city, I can walk to the grocery store, hardware store, restaurants, wineries, breweries, entertainment venues and sports fields.  My walks are shorter than they'd be in a big city and they are through quiet, tree-lined streets instead of noisy, crowded, shady city.  I can also walk to the beach to go swimming or hit the hiking / mountain biking trails right near my house.  There is also lots of great terrain for dirt biking and camping and a ski hill close by with short lift-lines.

I'm also able to afford a house here for the cost of a condo in crowded cities.  I hear my neighbors' dogs sometimes but that that is more pleasant and less common than hearing the neighbors' footsteps and music and smelling their cigarettes like I did when I lived in a condo.

[Bud]

When you are into the Ham radio and require space for HF antennas, the choice is obvious 

[Kasper]

It is common for variable rate mortgages to have fixed payments so when bank of Canada raises interest rates and your interest payment goes up, your principal payment goes down.  Lots of people are now getting "triggered" and having a 'surprise' payment increase

Variable rate is a gamble...That is why I never took a variable rate mortgage at renewals. Fixed rate is a bit higher but in a few months you stop noticing it and you can plan your finances and have no surprises.

My realtor and mortgage broker pushed the variable saying you can switch to fixed at any time.  The problem though is fixed rate changes without notice based on 5 year bond and went up before variable rate did.

Now we are in a strange time where 3 yr fixed (~5.7%) and 5 yr variable rate (~5.5%) are higher than 5 yr fixed (~5.4%).  Makes it seem as though rates will be going down soon.

[Bud]

bought my USA home in April 2021: 15years, 2.1%. 

Coupled with no penalty overpayments, you are all set!