BC Government offering interest free loans for house down payments!

ironchef said:
In the US, you can get a 30 year fixed rate loan that lasts the life of the loan so there is no surprised. We don't call 5/1 type fixed rate loans.
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Not here in Canada. In fact, I think we're limited to a 25 year amortization. You then select your term up to a 10 year fixed.
 
SimpleTrades said:
Yes, we do have the fixed rate mortgage. In fact, new rules in Canada require you to satisfy that you can afford the current (is it 5 year fixed at 4.8%?? - something like that). Most financially savvy people still choose the variable since its consistently lower than the fixed.

My issue however with the person who needs this new downpayment loan is that they've already demonstrated that they must use all their income for their lifestyle. So, despite qualifying at 4.8% and selecting the current 2+% variable rate, they will spend the difference rather than saving it.
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So just require the fixed rate if you're using the downpayment program right? For many people what you call their "lifestyle" may very well be buying food, paying their mortgage or rent, paying for transportation so they can get to their job, putting clothes on their back, and not much else. It seems neither very reasonable of or rational to damn them to exposure to raising interest rates and no ability to build equity by forcing them to rent simply because they don't have money left over after paying for life to save for a down payment? Wouldn't your entire society be better off if they were all locked into low interest fixed rate loans, given that their monthly payments were no higher than their current rent and rent will only go up for them over the next X years?
 
Sig said:
So just require the fixed rate if you're using the downpayment program right? For many people what you call their "lifestyle" may very well be buying food, paying their mortgage or rent, paying for transportation so they can get to their job, putting clothes on their back, and not much else. It seems neither very reasonable of or rational to damn them to exposure to raising interest rates and no ability to build equity by forcing them to rent simply because they don't have money left over after paying for life to save for a down payment? Wouldn't your entire society be better off if they were all locked into low interest fixed rate loans, given that their monthly payments were no higher than their current rent and rent will only go up for them over the next X years?
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Oh of course. Set a limit. Affordable Mortgage + property tax + reasonable maintenance must not exceed current rent, if they want to exploit loan. I'm all for that.
 
So are we done with the shoulds, woulds, and judgments from the ivory tower?

Go join politics or start a non profit to lobby Ottawa then. Anything else is mental masturbation.
 
jj90 said:
So are we done with the shoulds, woulds, and judgments from the ivory tower?

Go join politics or start a non profit to lobby Ottawa then. Anything else is mental masturbation.
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It's a discussion board my friend. I've learned a lot about the Canadian lending market I didn't know and it's stimulated some trading ideas for me. If you aren't getting anything out of it simply stop reading the thread.
 
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Sig said:
The first half of your post is great and very useful, thanks.
I am confused about the second half of your post. The top marginal rate in 2016 for personal income in Canada is 33% and capital gains is 16%, my marginal rate in the U.S. is 39.6% and my LT capital gains rate is 15% plus I lose some of that LT rate with increasing income and pay more. Perhaps you're just saying both countries have ridiculously high taxes, if so fair enough. I also don't get what Trump has to do with the price of real estate in Canada, or what makes Trudeau weak and what that has to do with real estate? Can you spell out the logic chain on that piece?
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Top marginal rate in Canada 33%??
I pay 50%
 
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