Peace = Better Rates?

追加: 2026-05-29

[00:00:00]There was a couple years though, it was definitely not [ __ ] great, okay? It was bad. It was really bad. People's memories can be very short, okay?

[00:00:07]>> He's old, he's bald, and he's got a lot to say. THIS IS ANGRY MORTGAGE PODCAST.

[00:00:14]>> WELL, it looks like we're slowly stumbling towards some kind of settlement in the Middle East. Slowly stumbling, stumble, stumble.

[00:00:23]Uh one day it's on, one day it's off, getting closer.

[00:00:27]You know, I I and naturally, every time it seems very close, the president says he's going to get the greatest deal in the history of the world, and then every time it inches a little further away, he says he's going to blow Iran to bits, okay? Like I don't know. This is It's really hard, okay? It's really hard. As a matter of fact, here's where I'm going on this.

[00:00:53]All of my [ __ ] are gone. My bag of [ __ ] is empty, okay? I can't give a [ __ ] what Trump says anymore. It's just too much. Too much. I can't It's too much. But, saying all that, it's probably close because you know, he's got to settle, or he loses the house, he loses the Senate.

[00:01:16]Because nothing on Earth do Americans hate more than high gas prices. And you know what? I don't [ __ ] blame them in the least, okay? Not in the least. All right, so what do we think?

[00:01:29]What is the impact on rates?

[00:01:33]Mortgage rates, particularly fixed mortgage rates. We're going to talk about variable in a second.

[00:01:37]What is the impact if there is peace in the Middle East? All right.

[00:01:42]We've already sort of seen it. We're watching it happen before our eyes. Bond yields have dropped 7% in just the last week. Yeah, that was a peak, by the way.

[00:01:53]The middle of last week was probably peak bond yield for 3-year fixed, 5-year fixed, it was a peak, okay?

[00:02:01]It's fallen 7%, which is a lot in the by the way. If you're a bond trader, you're both exhausted and ecstatic because you've been so goddamn busy trading bonds for the last 4 months that you're thinking this is And by the way, you make money when you trade. That's how it works. You don't Nobody trades for free. It's very small, but it's it's exists. So, you got this much action.

[00:02:26]You've been doing a lot of trading. All right, so yields down 7% in just 2 weeks' time.

[00:02:32]It's meaningful.

[00:02:34]Okay, so what does actual peace mean?

[00:02:37]Like what if it's getting close, we should think about what the actual results would be. So, will the price of oil just bottom out and will mortgage rates, you know, because oil, inflation, bond yields, mortgage rates, that's what we were talking about for 2 months now, okay? That's the cycle. Oil price goes down at the end of the at the end of the train is lower mortgage rates. Yeah, that's it. So, how how far, how fast?

[00:03:09]Hard to say because the reality of life is, as we've talked about, there's still over 2 billion missing barrels of oil in the world. Yeah, like this is that that production is that distribution is lost. It's going to take time to get it back up and running.

[00:03:25]Will there be a drop in oil price? Sure.

[00:03:27]Will there will it be the full will it drop all the way back down to 58 bucks a barrel? Highly unlikely, okay? That'll take time.

[00:03:36]So, will they immediate effect beyond rates? Yes, there will be another leg down in fixed rates. They're pretty high right now. Like a 5-year fixed could easily be 449, 469. We've seen 469. We've seen 489. Like crazy, that's crazy. Ever sign for that, big mistake.

[00:03:54]You could have gotten a better deal. But yeah, we've seen some very, very high rates in in the high fours. There's still like those 399 or like with one bank is kicking around if you're a special customer, but it's really the the vast majority of rates in the last um 2 weeks have been in in the mid fours, okay? So, will they go back down again? Yes. Will it take some time? I'm so [ __ ] lonely it'll take some time. It won't be overnight. There'll be a little leg down and then it will still in all in all likelihood it will remain above four for a little while. What's the most important observation you could get out of this?

[00:04:31]Variable becomes safe for the next few months. Yes, very safe.

[00:04:38]Because if you're the Bank of Canada and you realize the war is over, what why would you not sit and wait and watch and see if inflation declines?

[00:04:49]How long is it going to decline? How much will it decline?

[00:04:52]You would have no motivation if the war is over, you no longer have any motivation to protect against runaway inflation because you understand that this was a supply shock in energy.

[00:05:04]That's what ramped up inflation, and now we've got to see how removing the shock is going to allow things to recover. So, variable becomes a safe option at least for a number of months, okay? And that if you have to if you've got a renewal coming or you're you're hell-bent to buy a house, variable does become a better and variables the choice of variables are going up and up and up in the last, you know, 2 months. It's just soared. So, it's probably over 50% of all new rates stuck today are variable rates, okay?

[00:05:39]Canada. So, is that a great idea?

[00:05:43]If you do it smart, it can be a great idea. Hear me out.

[00:05:46]Variable and then watch that fixed rate like a hawk.

[00:05:51]If they drop which they should do. By the way, I'm kind of a bear on rates for the the longer term for the 6 months a year, 2 years. I'm a bit more of a bear on fixed rates for that for merge rates in general.

[00:06:09]But for this little interim I think you could take variable and then just meticulously watch where fixed rates go and I believe you will have your shot at getting a 399 or 389 5-year fixed. And which is by the way, the locking is for free. If you have variable, locking's for free. You rarely get the very very best rate offer because they know they got you with a 3-month penalty to get out of variable.

[00:06:36]But it's it's going to be okay. Like because if the very hottest rate is 379 and you're getting it for 389, you didn't get crushed. Okay, you're okay.

[00:06:48]That's the key. The plan should always be to lock in eventually and use variable as a tool. Okay? I know, I know there's people go, "Oh no, I swear by variable. I've been variable for 10 years. It's been great." There was a couple of years there it was definitely not [ __ ] great. Okay? It was bad. It was really bad. People's memories can be very short. Okay? But here's the idea.

[00:07:12]Again if there is peace in variable you don't have to be scared there's going to be any increase in the summer or even the early fall. You don't have to worry about it at all. Variable becomes tool. Now could rates eventually be pushed up?

[00:07:29]Sure. There's recession, Kuzma problems, that's coming up in July. Hey, some country could have a sovereign debt issue.

[00:07:38]Brits could just have a hell of a problem on their hands So, their long-term yields are way up.

[00:07:44]But, does that mean that it's it's it it we're we're going to be one of the last countries, I believe, where the US and Canada are lucky, energy independent.

[00:07:54]We're going to become one of the last countries to feel it. But, yes, there will eventually, I believe, there will eventually be some pressure upward pressure on rates in general, interest rates in general.

[00:08:06]Uh but, just mhm the the peace of the Middle East gives you a safe haven and variable.

[00:08:14]And I think people could take it.