this post was submitted on 12 Jul 2023
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[–] [email protected] 15 points 1 year ago (3 children)

I'm sure there's an argument to be made about not buying things you can't afford

There is. Taking on a mortgage is a huge risk. Looking at historic rates and saying "can I afford this when rates return to normal?" is important.

The scary part is that OFSI and the feds had to restrain both borrowers and banks by requiring the mortgage stress test is worrying.

I get that some individuals aren't going to stay within their means, but everyone? And banks too?

[–] [email protected] 5 points 1 year ago

That's just it. I'm paranoid, so I actually sat down and tried to figure out what would make me go bust, when we bought. It's always a risk, like you can't anticipate turns in health, job losses and sudden poorly timed housing market crashes. You just can't help that sort of stuff, other than saving saving saving. The problem with savings though, is savers have been absolutely punished in this country the last 20 years. High banking fees, super low to no interest earned on savings and erosion due to background inflation have eroded anyone's interest in saving money. But then these government and public sector folks have the gall to turn around and dare ask us why no one's saves. Like absolutely go fuck yourselves. The government and the bankers (usually these people are the same) have been fully complicit in causing this situation we are currently in. Their so called regulation is usually far too late, and far too watered down to have any effect.

Anyways I'm a saver nevertheless, so I'm fine for awhile. We also bought well below our means, we got lucky with timing and got in at a good time in our local market. With our current earnings, our mortgage isn't even 2x our annual HH income. It's actually barely even 1x. So that means we can take some heat, like I figure I'm good until somewhere in the high 30% interest range, before it starts to become a problem. The yield curve was upside down when we took out our mortgage, so variable mortgages weren't really on the table anyways, but I still would never have taken one. The past 20 years, they've been the winning strategy too, but one just has to know that this can't last forever. It's getting pretty stupid. But again, everyone's been complicit in absolutely pummeling people with conservative financial stances, and whelp, here we are.

[–] [email protected] 2 points 1 year ago

Everyone who is currently about to fail to stay afloat passed those stress tests. Staying "within your means" is entirely relative to the borrowing environment. There's no reason to gloat. You won't win in this scenario -only cash-flush corporations that can swoop in and convert housing to rentals.