Mortgage Rates Increase
Canadians have been enjoying historically low mortgage rates for some time now, but as economists predicted, we recently saw them increase. For example, the 2.99% 5-year fixed rate is now up to 3.49%. While rates seem to be in a holding pattern for now, there could be more increases to come. How does this affect a Buyer? A slight increase can have a significant impact on monthly payments. For instance:
A 1% difference on your mortgage rate on a $250,000 mortgage at 3.49% over a 25 year amortization period your monthly payment would be approximately $1,246. The same $250,000 mortgage at 4.49% at 25 years would be about $1,382 per month. That's a difference of $136 per month, or $1,632 per year. If you are contemplating a new home purchase, there is no time like the present! Your purchasing power is never better than now!