If yields drop energy will rally as those 3-4% with slow growth become more lucrative

And we closer to the top of hiking cycle than anywhere else

That's my general thinking as well. While there's a lot of gloom and doom outlook out there right now (frankly, always is) at least the Central Banks are in a vastly better position now in that they're at least able to actually do something in an attempt to create stability.

I don't know about the USA but here in Canada though we have seen a rise in negative amortizing mortgages on our big 4 banks balance sheets YoY. There's always been a general sentiment among Canadians that you don't walk away from a mortgage, I don't know if that holds true with younger Canadians that made these home purchases a 1.75% suddenly up for 5 year renewals in the near future. This could cause some major future problems, but well see. I am not going to sit on cash waiting for it, despite a GIC yielding 5%+ right now.

This post was edited by SBD on Oct 16 2023 01:09pm

American market is a little different because fixed rate loans are the vast majority

Canadian and American central bankers have been in lock step. I think we have been at peak rates but JP can’t say it publicly because history argues against premature victory talk

Plus all these macro headwinds are pro inflationary

I'm locked in my house forever. 3.5% 30 year mortgage. Refinancing or selling would be very dumb.

Yeah dude we are in the same situation

We love our house and remodeled but it’s not our forever space. However we are Locked in 2.25% 15 year fixed. My credit score was SO bad out of residency that the only way I could negate it was to get a 15 year instead of 30 year lol.

Will see if rates ever come that low again in our lifetime, pretty good snags by us

Sounds like a future rental property.

Exactly lol

Do Americans have the Canadian equivalent to Principal Residence for tax purposes? Your principal residence will not be subject to capital gains on a disposition, you can only have 1 principal residence at a time.

If so, either of you are laughing. When it changes to a rental property, it would just be a deemed disposition for the change in use but not subject to capital gains since it was your principal residence, the property now has a new bumped up cost basis since a deemed disposition for change in use means it's disposed of at current FMV and that represents its new cost.

Edit: I see you have an exemption limit in the USA that doubles if jointly filing up to 500K. Ours is vastly more flexible.

This post was edited by SBD on Oct 17 2023 08:36am

Yeah we have to have a primary residence

But the process to transitioning a primary residence to a rental
While acquiring/changing your primary residence to another is fairly smooth depending on what state you’re talking about

The biggest hit is when you sell the renal property, which was just your primary residence, the income is subject to capital gains tax. But if you keep it as a rental there are a ton of tax perks you get such as deducting operating expenses, repairs, mortgage interest, property tax, a couple other things I can’t think of

There are a few mechanisms in play to reduce tax burden if you sell the rental, main one being turn it into your primary residence again. If you have owned the property for 2 years it’s actually not hard to transition it back to a primary residence to offset tax burden

Yeah here you can sign an election on deemed disposition when a property has a change in use (from primary residence to rental property). IF you sign the election it still remains your primary residence despite it being used as a rental property but you cannot take capital cost allowance (deprecation) on it which is typically a major expense to offset rental income. That's your trade off for eliminating future capital gains and keeping it as a primary residence.