🚀 go-pugleaf

"Dave Null Sr." (mx5yow@canQada.com) writes:
> That is only true today. In the past, rates for one year
> terms have been the same or higher than long term rates.
> In times of stability, long term rates are about the
> same as short term rates.

Mortgage rates are tied to long-term bond rates. On occasion 
the rates for the shorter terms exceed those for the longer 
terms, however this is an anomaly. I believe that was the 
case when rates skyrocketed in the early eighties.

On average rates for long-term mortgages have usually 
been slightly higher than those for short-term mortgages.
So the situation today where 5-yr rates are more than 50% 
higher than 1-yr rates is also an anomaly.

BTW you can go to 
http://www.bankofcanada.ca/pdf/annual_page51_page52.pdf 
to see the average 5-yr mortgage rates going all the way back 
to 1951. Interesting to see that in 1972 a 5-yr mortgage 
rate could be had for around 9%. In 1972 CMHC was providing 
30-yr mortgages at 9.25% - a few of those are still around and 
are due to be paid off shortly. 
 
>   25 year       8.950

Interesting. I did not realize 25 year mortgages are available
again.
  
> Home ownership is more expensive than renting. 

Home ownership is more expensive, but only during the first 
years of ownership, at least hypothetically.

Due to inflation home prices and rents keep going up while 
the majority of costs associated with homeownership 
(mortgage payments) are fixed. At least this has been 
true in the long run in the past.
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