Real Estate, budgets and drop in prime, what does that mean to you?

I’ll tell you, it’s a good thing. A rate drop means that borrowing money to buy a house or that line of credit is cheaper. Those home equity lines of credit with variable rates are looking pretty darn good these days. Now this budget delivered today would have us getting credits and reductions. Putting more money into our pockets to buy the things we need. This combined with some of the best buyer selection for real estate in many years equates to now being a good time to buy.

The rates:

A 50 point drop means to you or me a savings. Right now 5 year rates can be had at 4.39%. Look at the 7 year rates and they are 5.87%. At first glance that tells me that long term rates are expected to rise. 1 year rates are at 3.5% so short term money is cheap, long term the cost of borrowing is going up. (visit for Current rates and calculators.

A $300,000 mortgage amortized over 25 years on the three different terms clearly shows the monthly payment savings to be had.

1 year term, at 3.5%  5 year term at 4.39% 7 year term at 5.87% 
 $1497.81  $1642.12  $1896.30

I know an extra hundred or two hundred dollars would help my family, how about yours?

Question is, can you afford to have prices go up and interest rates?

The budget highlights and what they mean to you and I?

For individual taxpayers, the government promises to boost the basic personal amount – which would allow people to earn more before they have to pay federal tax. The basic amount would go from $9,600 to $10,320, retroactive to Jan. 1.

The government also plans to raise the upper limits on the two lowest income tax brackets. The upper limit for the 15 per cent bracket would go to $40,726, while the upper income limit for the 22 per cent bracket would rise to $81,452.

A new home renovation tax credit would give up to $1,350 in tax relief on home improvement projects. The eligible expenses must be at least $1,000, but not more than $10,000, and the work would have to be done between Jan. 27, 2009, and Feb. 1, 2010.

So at the end of the day we should have more money on our pay cheque to deposit into our accounts, and to fix up properties and increase fuel efficiencies we can do so with less financial pressure.  Visit for more detalis on the budget.

Your Friend in Real Estate,

Patrick Galesloot

Budget source and highlights

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