Why You Shouldn't Choose A 3-Year Fixed Mortgage In 2024

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[MustyBastard]

there was nothing to predict. It was a promise of next to free money for 5 years. I have always taken fixed. To me, it was status quo, no brainer. But I am a simple minded accountant, not an economist.

[insanegixxerdude]

So glad ww paid off our mortgage in 2020. We pushed hard when rates were low to pay off the house in the 11 years Total. Now we are reaping the benefits of decent fixed income investment rates with the last 3 years of being able to have more savings to invest.

[epictetus]

With all due respect it was pretty obvious what was going to happen in 2020/2021 when they started printing money. When they print money you get inflation and the only way to combat that is to raise interest rates.

The problem is even knowing that, what are you going to do to decrease your losses when they start printing? The only thing you can do is to buy assets to protect your wealth. If you stack cash you lose an enormous amount of money.

[frankf]

if you choose a 5 yr over other options you are timing the market
you could end up making the wrong decision and costing yourself a lot of money
you warn against timing the market but end up "placing a bet" based on your unfounded expectations

[thegrindmcoc]

We got a 3 year mortgage May 2023, and now feeling maybe should have been 5 year.. only time will tell. I should clarify that we got lucky with an extremely low rate and it was the same rate we could have gotten the 5 year mortgage for (5.09%, which at the time was prime -1.6%)

[universalsorrow]

bro are you hearing yourself? interest rates can go up? if that happens, half of canada is going to go bankrupt. the last thing you would be worrying about is the interest rate you're paying. it's going to be the fucking apocalypse if rates don't go down; and the thing you should be concerned about is mass riots and whether you have weapons and non perishable food and a safe shelter.

[GreenBeanGreenBean]

You get a 3 year because you don't want to get a 5 year fixed and then have to break that mortgage and pay a huge penalty because you have to move because it's not about rates (because usually the 3 year is lower/cheaper/better) but about not paying tens of thousands in penalty....

You want that option to move every couple of years anyways. Or the option to redeploy your capital.

If it's your forever home then you shoulda really gotten a 10 year+ mortgage when the rates were low.

[alanmcclelland]

Show me figures/data / examples of ' Non Bank Lender' penalties.

[vert]

im shocked. you made this video to sell 5yr mortages and then you say rates are going UP? when everyone is saying GDP is negative and BOC is saying they might have overdone it. everyone else is saying rates are not going up anymore, why are you spewing this fear?

[gilbertmiao]

wrong. even the rate dont go down 3 years later, you can always get a new term. Unless you think it will go up much higher by then, which I don't believe so. If so, there will be a major catastrophe, and you should not buy right now anyway. so, you should speculate, the spread between 3y and 5y is not worth being locked for 2 more years.

[raze]

Good thing i wont need a mortgage soon

[drblaze]

Good video, but please stop flashing words at me like I'm some TikTok moron. I really detest this trend.

[jeffotoole]

Come on you can always front run what the market and policy makers do didn’t you know? The word on the street is that rates can’t stay up because everyone will be screwed if they do. Obviously policy makers know how pickled people are in debt and they wouldn’t be so cruel to cause them pain. Sounds good to me I am sure this is what’s going to happen.

[jmela]

One major issue is that a lot of the RE investors and speculators in Canada can’t even afford the lower 5 year fixed rate

So they’re gambling and hoping rates magically drop while all signs point to rising rates for longer and longer.

Good to know Canadian RE investors are in great shape when lots can’t get approved at canadian banks for mortgage when construction gets completed