Coronavirus (COVID-19) Discussion Thread

[Bofferbrauer2]

sethnintendo said:

SvennoJ said:

Banks are also providing variable mortage rates under 2% interest. Good short term, but as soon as things recover those mortgages will all go up, a lot... We're set up for a new housing bubble as well.

Some bears out there think that the coronavirus crisis could be the pin that ends up bursting Canada’s housing bubble. The frothy Vancouver and Toronto real estate markets are among the frothiest on the planet. With rapidly rising unemployment levels as a result of COVID-19-induced lockdowns, many Canadians may be at risk of defaulting on their mortgages.

Even before the coronavirus, many pundits warned that there was a housing bubble forming in various parts of the country. With growing fears that we could fall into a depression environment, it would be foolish (that’s a lower-case f) not to rule out a scenario that could see a tonne of mortgage payment deferrals turn into defaults.

I thought people learned their lesson with variable rate mortgages back in 2008.   Adjustable rate mortgages should be banned.

That being said I don't see USA raising rates for at least a year or two.  However whenever rates do go up the payments go up and then shit happens.

You get those anywhere in the world and in most countries, there's no problem with them. The Problem in the US is that they are not linked to the rates from the central bank or capped in any way. Mine never went past 4.65% but dropped as low as 2.25% yearly rate during the 8 years I was repaying my loan.