The current direction of The Bank of Canada (BoC) to continually raise interest rates to curb record-high inflation has caused a lot of anxiety across Canada as to how to manage not just day-to-day expenses but the cost of home ownership.
Is there a silver lining within this “interest rate storm?”
Even though interest rates are high, this also means that property prices are and continue to be moving lower than peak levels from a year ago. This translates into a great opportunity for Canadians who were priced out during the peak period.
To take advantage of this, the following information for would-be-buyers is key to think about before buying:
2. Remember, choosing a lengthy fixed-rate mortgage to secure a consistent payment schedule over the long term is ultimately locking into the current peak rate. There are significant payment penalties if a homeowner tries to break that mortgage arrangement. When rates drop, fixed-rate owners will have little choice but to continue paying that high rate.
3. However, a variable interest rate is not always the best solution in turbulent times. Consider a short-term fixed rate of a 2 or 3-year commitment to managing short-term volatility. Having an opportunity to reassess market conditions in this type of market could potentially save a homeowner thousands over the life of a mortgage.
4. No two lenders have the exact same policies! Make sure to fully investigate that the lender chosen has fair and consistent policies before committing to a mortgage lender. For instance, is there an option to break the mortgage at a cost that is reasonable to maximize cost savings? When in doubt, ALWAYS ask for an explanation of the details before signing.
Above all else, talk to an expert that you can trust. If you are thinking of buying a home, Sue Heddle Homes can help. At Sue Heddle Homes, our commitment to our clients is unparalleled. We are dedicated to helping you find the best home for your needs, for the best price. Ready to get started? Give us a call at 416-906-7998.