Mortgage Rates are Beginning to Increase Slowly
The Canadian mortgage rates are now starting to increase since the Covid-19 pandemic, but with home loans still around the low levels, the red-hot housing market is unlikely to slow down.
With the lowest rate for a five-year fixed rate mortgage, the most common mortgage in Canada has had it's first increase of 1.64 per cent since January 2020. This can encourage home buyers to lock in low borrowing costs before the rate rises again.
Back in March of last year, the record low interest rate was of 0.25 per cent to support the economy while the pandemic. These low mortgage rates have raised the demand amid the pandemic for the Canadian housing market. Over half a million homes have been traded last year based on the Canadian Real Estate Association.
Mortgage Rate Forecasts
Is it best to lock in a regular 5-year term mortgage rate?
When people look at applying for a mortgage with their homes, they usually go with the standard 5-year fixed rate for a sense of security. However, is it better compared to a variable mortgage rate. Banks usually charge higher interest since you are borrowing at the privileged fixed rate for your home.
Let's say the interest rate is 2.00% on a 5-year fixed mortgage rate but you will only start to benefit if the variable rates begin to increase, which is not expected to rise until late 2023. Locking-in only makes sense if the variable rates rise by a minimum of 1% for the last 2 years in the mortgage term. No one is forecasting these types of rates until at least 2026.
If you have questions or need help contact us at https://www.m8trix5.ca/businessconsultingcoachingvancouver
Want to learn how to invest in stocks and get over 100% or more in returns? Click on the link below now!
Follow us on Social Media Etc.
Instagram - www.instagram.com/askdannou
Facebook - www.facebook.com/askdannou