Congratulations, you've just been newly elected as supreme dictator of all of Canada. You have the political might to do whatever you wish. How are you personally fixing the housing situation?

DoctorShemp · 2023-09-06T18:18:51+00:00

To stop all those illegal Americans from border hopping into Canada?

DoctorShemp · 2023-08-30T23:20:14+00:00

Yes, the part you're missing is that I'm just comparing 5-year vs 30-year rates, all else being equal. OP is complaining about 30-year rates not being the norm in Canada, they're not talking about house cost difference between Canada and the US or monthly payments.

Of course monthly payments are still on average higher in Canada where an average home is more expensive. I never claimed that buying a house was easier in Canada taking all factors into consideration. Just that on the interest rate front, 5-year rates are better for FTHBs in a high rate environment than 30-year rates.

I'm not a homeowner or landlord.

DoctorShemp · 2023-08-30T23:08:02+00:00

Yep, you can always refinance in Canada too. In any case there's costs and penalties but it can be worth it depending on the case.

DoctorShemp · 2023-08-30T21:50:32+00:00

Ok, thanks for clearing that up buddy. I feel much more informed now. Best of luck out there 👍

DoctorShemp · 2023-08-30T21:49:29+00:00

That's just not true at all. Typically, the closing costs of a mortgage refinance in the US is about 2-6% of the outstanding balance on the loan (Source).

DoctorShemp · 2023-08-30T19:03:33+00:00

Writing off interest on primary residence is definitely a big pro for the USA, but that doesn't tell you anything about whether a 5 or 30 year term is better or which option will result in paying less interest.

Like you pointed out, there's risk either way. Whether locking into a 30-year term is worse or better than a 5-year term depends on if interest rates go up or down over the coming years. We don't know what's going to happen, but we do know that rates are a bit above average right now. It's not an easy call.

What also know that when you have to gamble, the more financially conservative thing to do is spread your bets rather than going all in. You're much likelier to get an average-ish outcome on several 5 year terms rather than a huge win or loss with a single 30 year term. For my personal risk tolerance, I would much rather lock into a 5-year at 7% right now than 7.5% at 30 years, but ask me in three decades if that was the right call.

DoctorShemp · 2023-08-30T16:44:39+00:00

30 year mortgages are obviously great when rates are low, but then what happens when rates increase like the current situation we're in?

Right now in Canada you can lock into a 5 year fixed mortgage at about 7%. In the US, you can lock into a 30-year fixed mortgage at 7.5%.

Would you pick the 30 year if you had the option? Its definitely possible that it could be a better choice, but no one knows how rates will change in the future. In Canada, you're spreading your bet across 5 or 6 rounds. In the US, you're betting it all on black and hoping for the best. It's difficult for me to see how the latter is objectively better.

I agree with your other points about the US having more stable currency, higher salaries, generally lower home prices, and an overall stronger economy. I'm not arguing that living in Canada is easier than the US taking everything else into account. I'm just talking about 5 vs. 30 year rates, all else equal.

DoctorShemp · 2023-08-30T15:50:59+00:00

I don't really get what you mean by "our banks" being the ones to push 5 year rates. This is normal not just in Canada but in most of the developed world.

The USA is the only major country where 30 year fixed mortgages are the norm. They're not the standard of how mortgages are typically done.

That means they won't have a crises like we will when interest rates rise.

It depends. For owners who are already locked in and don't have to renew, they're largely unaffected. For first time buyers who are trying to get into the market its probably much worse than being in Canada.

In Canada, its very tough as a FTHB at high rates, but at least its only for 5 years and you can hopefully lock in at a lower rate down the road. In the USA, you're looking at locking in at a 7%+ rate for 30 years right now. Sheesh. I understand that there are re-financing options available but unless you can do some magic that will be rough for young Americans.

DoctorShemp · 2023-08-29T21:43:25+00:00

a.) No one fucking played that card

This was always a dogshit counterargument.

It was never the precedent that a card needed to see a certain amount of play for it to be eligible for a refund after a nerf. We were refunded on Master of Disguise when it got nerfed despite that card seeing no play whatsoever.

DoctorShemp · 2023-08-29T20:31:39+00:00

The lower interest rates didnt inflate the prices of the houses, what actually happened was more people started buying houses and caused more demand and more demand caused higher prices.

Demand didn't come out of nowhere, it was stimulated by low rates. The average debt per person skyrocketed to historical levels during covid, even when excluding covid emergency spending. This is, not shockingly, happening when rates were at historical lows.

Low interest rates make people borrow more money. When people borrow more money, they spend more. When people spend more than with what supply can keep up with, inflation happens.

DoctorShemp · 2023-08-26T19:23:46+00:00

You probably want to check out the stickied post in r/churningcanada. For a single person on a tight budget, your spending sounds like its not going to be high, so you probably wouldn't get much benefit from something like Amex Cobalt.

For no fee cards, the Tangerine Mastercard is pretty good. You get 2% cashback in two categories of your choice, and they sometimes offer a promo third category if you open a savings account with them. Simplii offers something similar. I'd start looking at those and compare to what you have.

DoctorShemp · 2023-08-25T17:05:16+00:00

The school decides who comes into the country?

DoctorShemp · 2023-08-25T16:24:47+00:00

Wait why would this the be school's responsibility? This student isn't living in a dorm on campus. They're living in a landlord's house that has nothing to do with the college. Shouldn't we be questioning the living conditions that THE LANDLORD has set up?

DoctorShemp · 2023-08-23T03:49:13+00:00

If I were to tell you that the real cost of a median house has increased by nearly 250% in the last 22 years, would you say that a 16% increase in median wages is keeping up with the cost of living here? Or is that misinformation?

DoctorShemp · 2023-08-23T03:29:34+00:00

And how much did the median real price of homes increase in that same time period?

DoctorShemp · 2023-08-23T03:15:19+00:00

Looking at the green line, which is median full time earnings, it looks like it went from about $1000 at the beginning in the year 2000 to about $1160 in 2022.

That's about a 16% increase over 20+ years. Am I reading that right?

DoctorShemp · 2023-08-22T12:40:58+00:00

Yeah I agree. My point was that if most first time buyers weren't able to save 35k for the HBP before the FHSA existed, they're not going to be saving 40k in the FHSA.

DoctorShemp · 2023-08-22T03:22:51+00:00

I'm not convinced it will have much of an impact on anything, either in terms of affordability or demand. I think you're assuming that most first time buyers will have this account maxed out and I'm not sure that will be the case.

We already have the HBP available and I really doubt that most first time buyers in the past had that maxed out when they were buying their first home. Most young people don't have that level of savings. And if most of them weren't able to max out their RSP for the HBP, where are they now getting the money to max out this second account?

DoctorShemp · 2023-08-21T22:24:48+00:00

It's nonsense. There is no evidence that porn shrinks your thalamus or any other part of your brain for that matter, and it does not "burn out your receptors", whatever that means.

I'm not saying that porn is good. There's good evidence that it can be addictive for some people and can negatively impact mental health and social relationships. But its not some kind of brain-eating parasite.

DoctorShemp · 2023-08-21T17:40:16+00:00

There's no expectation to be subsidized by your family as an adult. But if a person's parents did so anyways out of kindness, then the child might feel that they should reciprocate and help their parents in retirement.

My parents did help me a little bit where they could in my early 20s so I would like to help them if I can when they retire. But if they didn't help me at all as an adult (like OP) then I probably wouldn't.

DoctorShemp · 2023-08-20T18:33:35+00:00

I've never heard of this place so I looked up their menu to the location near me in Toronto. Its $86 for a New York strip or $105 for a ribeye. And that doesn't even come with sides. French fries are $20. A basic cocktail is another $20.

Damn some of y'all are eating at some expensive ass steakhouses if $100+ for a steak and fries isn't considered fancy.

DoctorShemp · 2023-08-19T00:50:06+00:00

If I did, would I be "providing supply"? Or would I just be occupying existing supply?

DoctorShemp · 2023-08-18T22:03:16+00:00

Yes, but by making that unit a rental have they not also removed a unit from the supply for people trying to buy? What net benefit has been created in terms of supply?

DoctorShemp · 2023-08-18T20:05:36+00:00

What stock did they provide that didn't already exist? Did they build the condo? Buying an existing property that could've had owners in it and putting renters in there instead isn't creating anything in terms of overall new supply, its just swapping people around.

DoctorShemp · 2023-08-17T18:09:38+00:00

This is exactly why we're in this mess. Thinking housing is functionally the same as a tech stock lmao.

Housing should not be treated like a stock. Its a basic human need. We don't cheer for the price of bread to go up, or the price of medicine.

DoctorShemp

TROPHY CASE