this post was submitted on 24 Jan 2024
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We had to sell a piece of dream property this year because rates made payments go up so much that we could barely do minimum payments. We had planned to build on it eventually. Inflation and interest rates made it impossible. Now the dream is a memory. We just hope we can hold on to our current house.
I can afford my house even at 5% because I intentionally bought WAY under what I was approved for. I knew the lower interest rates wouldn't hold... and there was no way I was willing to buy into a multi-million dollar home at 1%. Rates go up and down over time. I bought based on the assumption that a renewal would be in the 6-8% range. At 5% I can afford it just fine... question is, do I want to?
A LOT of people I know bought right at the max they were approved for, and at 1-ish percent interest. Renewals are coming up within the next 12 months or so, and they are already panicking. That $2M home is going to suddenly become VERY expensive... well beyond their ability to pay for it.
I plan to sell this year... and take that equity, whatever we get, and set ourselves up elsewhere outside of Canada.
We did too. Bought for less than $100k. We have fixed rate ATM on our mortgage. But as soon as it is ready to renew we hope things have settled down. We never want to live above our means. We got lucky.