Posted by: Daryl & Wendy Ashby | October 28, 2010

Why Wait ?

In this market a lot of purchasers are waiting for what they think are lower prices and with the rates not moving much are getting complacent and not worrying so much about:

1. Getting properly pre-qualified 

2.  Obtaining an interest rate guarantee for as long a period as you can. 

When rates go up there is no advance warning,  they just move, especially the fixed rate mortgages since they are not tied to the Bank of Canada Prime rate, but are dependent on the Bond Market.


Consider the simpler side, if rates go up by 0.50% based on the 5.0% down payment mortgage scenario above,  the monthly payments will go up by $156.00  per month.  If the purchase price of a house drops by $20,000.00, the monthly payment on the mortgage will only change by approx. $40.00 per month. 

Essentially, don’t wait for a price reduction if this is the property you want to purchase, consider the alternative to paying a higher rate and the additional income required to qualify is more important.  The higher rate will cost you more in the long run.  

Current interest rates for five year fixed term mortgages are ranging from 3.45% and up depending on the lender and their respective requirements. Rates for Variable Rate Mortgages are ranging from Prime minus 0.60% – Prime minus 0.70%

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