NEED FASTER
Well-known member
EDIT: Deleted. Drunk post sharing TMI. 
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Mortgage Rates
- Thread starter ToSlow
- Start date
Mad Mike
Well-known member
In Canada interest on credit cards is calculated daily based on the closing or average daily balance each day using the formula interest=balance*rate/365. Daily interest is not compounded day over day meaning the interest accrued on day 1 is not part of day 2 balance - it's only compounded after its billed at the end of the current cycle.
Interest is accrued daily until the statement cycle date then posted as a single interest charge. If you pay the balance in full by the due date, interest is waived on purchases made since your last statement. Cash advances and cash-like transactions always have interest. "Deadbeats" (a new term taught to by @Lightcycle ) can use banks money free for about 50 days if they make a purchase the day after the statement cycle date and pay on the due date.
There is another interest calc, residual interest, a small interest charge that can sometimes confuse people if they pay in full. That's a bit harder to explain (I can explain, it's a bit complicated).
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Mad Mike
Well-known member
When people really go bananas is when they pay a day or two late. That's when your lesson comes into play, as you see an interest charge.
Next cycle they pay on time but go double-bananas when they see a small interest charge again, this can go on for months - I've seen people go full-bunch-bananas after seeing residual interest of a few pennies getting charged for several months.
If you habitually pay in full and accidentally miss by a few days, call your provider and ask them to waive interest. Most do over the phone once a year as a courtesy.
Yeah, that's happened to me a few times over the years. There seems to be a bit of a grace period to allow for weekends and holidays, but if I do get unfairly dinged because the payment has been lost in transit for too long, I just call them up and they always reverse any charges. But yeah, a pain in the butt to have to spend time on the phone waiting for a CSR. Problem is that unless you're checking online every few days, often you don't get notified till the next statement, almost a month later.
If I've paid on or before the due date, I don't recall ever being unfairly treated after explaining the situation. It's such small potatoes to them.
Mad Mike
Well-known member
Bank payments to credit cards work 2 ways.
Own bank. Payment is made real time if its a transfer between accounts in the same bank.
If you have your card setup as a payee in your banks bill payment system, your funds are received by the payee bank next biz day by 11am ET. (Your payment must be made before COB, typically 6pmET)
Once your bank receives payment, it can take up to 5 business days to post to your account and be visible. Despite the delay in posting, the credit date and posting date should be the day they rec'd the funds.
I'm guessing your credit card comes from a big blue bank. They can take 5 days to post a payment.
I have helped 2 relatives manage credit card issues. In both instances they had a poor understanding of the importance of making minimum payments, making these payments on time, not exceeding their credit limits, how cash advance interest is calculated and managed and how bank fees can add up. Due to this they were hit with punitive "penalties" month after month across 3 or 4 credit cards. In addition, these folks also used their debit cards or credit cards for cash and thought nothing of using a convenience store ATM to withdraw $20 and then pay $7 or $8 dollars in fees.......... CC penalties and bank fees totaled $150 - $200 per month.
- If you have sufficient funds all your credit cards should be set up to auto pay 100% of the monthly balance due. Then it is the bank's responsibility to debit your account on time. If you have money issues set up an auto payment for the minimum payment, then you'll never be hit with a late payment penalty.
- If you have exceeded your credit limit on a card then you need to pay down the excess ASAP or you will be charged a penalty every month.
- If you have a cash advance against a credit card it is often at a higher interest rate than regular purchases. Payments to this CC will be applied to your regular purchases before it is applied to your cash advance balance, ensuring you are always being charged the maximum amount of interest. If you must take cash advances do so from one of your cards and then work to ensure this card is paid off monthly.
- Once you have eliminated monthly penalties then pay down the CC with the highest interest rate first vs. the CC with the lowest O/S balance. This gives you the best bang for your buck.
Mad Mike
Well-known member
A few other tips if you're in too deep with credit cards.
Call your bank to see if they will convert your debt to installment credit (loan). It will be at a much lower rate.
Call your bank and ask to switch to a low interest credit card. You will lose cashback/point/mile perks, but save 5 to 10x the benefit over reward programs. Switching could save you 30-40% in interest charges.
Call your bank and ask them to block overlimiting. Most issuers allow you up to 10% overlimit before declining your card. If you go overlimit, they ding you about $30 for that month.
Weee. Look at that amortization clock spin.
www.canadianmortgagetrends.com
Remaining amortizations for TD residential mortgages
Q4 2022 Q4 2021
15-20 years 13.5% 19%
20-25 years 29.5% 42.1%
25-30 years 19.2% 28.2%
30-35 years 3.7% NA
>=35 years 25.2% NA
One quarter of TD mortgages now have an amortization of 35+ years - Mortgage Rates & Mortgage Broker News in Canada
Over a quarter of TD Bank's residential mortgage portfolio now has an effective amortization of 35 years or longer.
www.canadianmortgagetrends.com
Remaining amortizations for TD residential mortgages
Q4 2022 Q4 2021
15-20 years 13.5% 19%
20-25 years 29.5% 42.1%
25-30 years 19.2% 28.2%
30-35 years 3.7% NA
>=35 years 25.2% NA
And hoping that prices continue to climb. It is interesting to see the disparity to most US markets where prices barely change with time. You pick a far different house when it is an investment adding more to your net worth than your income compared to a housing first and foremost.rent with you paying upkeep...
Renting isnt that mobile either. Rent control means people cant move as a similar apartment in a location better for their current life will be astronomically more money. There is no easy path.
And the economy keeps on chugging along as if nothing bad is happening.Weee. Look at that amortization clock spin.
One quarter of TD mortgages now have an amortization of 35+ years - Mortgage Rates & Mortgage Broker News in Canada
Over a quarter of TD Bank's residential mortgage portfolio now has an effective amortization of 35 years or longer.
Remaining amortizations for TD residential mortgages
Q4 2022 Q4 2021
15-20 years 13.5% 19%
20-25 years 29.5% 42.1%
25-30 years 19.2% 28.2%
30-35 years 3.7% NA
>=35 years 25.2% NA
I wonder if we will actually feel the sting of these interest rates as a collective.
As an individual…yes it hurts each time they raise the rate…but as a society…I’m still seeing things going. Malls are full. Black Friday shopping was great by all reports I’ve read.
Buddy works in residential construction and they’re laying people off and the residential market has apparently fallen off the cliff. Commercial and big condos keep chugging along like there’s no tomorrow.
Job numbers are good and I believe the unemployment rate went from 5.2% to 5.1% this week.
AllistonGT
Well-known member
As I understand it, condo's must continue once started. House builders have pretty much stoped.
Housing near me is going up fast. I suspect they will wait before bringing new projects to market but everything sold at the peak (which was a lot) needs to get built as it is super high profit. Either original buyer closes at the agreed price or you relist and original buyer pays difference. Either way the builder wins.
Different trades are affected at different times. Foundation work sees the trend earlier, finish carpenters later in the game. When do the dominoes start falling in mass?
AllistonGT
Well-known member
Wife works in a law office. Already seeing buyers walking from purchase agreements. Also seeing banks refusing to proceed with pre approved mortgages. They have an exit in the fine print. Purchased property still has to appraise to banks satisfaction.
Mad Mike
Well-known member
There is way too much money floating around the economy. When JT was first elected, there was $1.5t Canadian dollars circulating. Today it's $2.4t, besides printed almost $1 trillion dollars.
Those dollars are chasing goods which bids up the price (inflation).
Canada M2 Money Supply Monthly Trends: Bank of Canada Interest Rates | YCharts
In depth view into Canada M2 Money Supply including historical data from 1968 to 2024, charts and stats.
ycharts.com
All that credit card talk brought back ptsd...
Did credit card customer service (and then CC level 2 support) for about 2-3 years.
It's said that back then, about a decade ago, about half the people paid in full in canada, the other half paid interest monthly. But most people don't really know how things work. ANd it's a PITA to explain most of the time.
They've gone through several iterations to try to make statements clearer over time.
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