Canada mortgage rates ? How rates will affect the real estate market
Canada mortgage rates ? How rates will affect the real estate market
Low mortgage rates have helped drive the real estate market in Canada and lead the economic recovery. Canada mortgage rates are expected to increase over the next 18 months, so how will they affect the real estate market?
Real estate in Canada has maintained steady growth and good value over the long term. The housing bubble that burst in the U.S. did not occur here, with our tighter banking rules and good economic fundamentals. The hot real estate market in recent months appears to have been based on temporary factors, including historically low mortgage rates and pent up demand from the recent economic recession.
The real estate market was a major driver for the economic recovery in Canada. Low rates made mortgages more affordable, and the real estate market became hot in many parts of Canada. Toronto and Vancouver experienced record prices and sales, with many properties going in bidding wars. Now, however, the general consensus from Canadian bank economists is that mortgage interest rates will rise throughout 2010 and 2011. How will that affect the market?
The average forecast by the major banks is a rise in overnight rates of 3.17% by the end of 2011. Some banks forecast a lower rise and some a larger one, but all agree that rates will be going up provided our economy and the global economy continue to recover. Despite the expected increases, mortgage rates will still be affordable compared to historic rates.
It is not possible to pick the best time to buy or sell your house. If it is a sellers’ market, you will get more for your current home – but will pay more for your new one. If you are an empty nester or looking to downsize, this type of market might be right for you. If it is a buyer’s market and you are looking to move up, or are hoping to take the leap from renting to purchasing, then higher inventory levels and lower prices would be to your advantage. Despite market conditions, your lifestyle, personal situation, financial situation and location will all influence your decision to move.
When you are ready to start looking for a new home, it is wise to calculate how much you can afford before you start shopping. Speak with a qualified mortgage broker to analyze your situation and help you find the best mortgage and terms for your needs. Since mortgage brokers deal with hundreds of lenders and products, they can usually find you a better deal than your bank. They can also pre-qualify you and hold a rate for up to 120 days. If you live in Ontario, Mortgage Medics is a team of Greater Toronto mortgage experts offering the best Canada Mortgage rates.
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Category: Rates
