January 6, 2016
RBC announced today that their mortgage rates will be increasing on January 8th. While you still have 2 days to get an application started and lock in the current rates, for most, it will mean your mortgage just got a bit more expensive.
Let's take a quick look at the impact;
Assuming a home purchase of $500,000 using 5% down, your balance to finance would be $475,000 plus the mortgage insurance (required by financial institutions when using less than 20% downpayment) of $17,100 for a total mortgage of $492,100.
Using a 5 year fixed term with a 25 year amortization (the most popular combination) and a current available rate of 2.79% the monthly payment would be $2,276. Using the same terms at a rate of 2.94% the payment would be $2,314 for an increase of $38.00 per month. While these rates are subject to credit approval and review, these are rates commonly available and are used for purpose of comparison only... the rate you qualify may be different.
Simply put, by the end of this week, owning a $500,000 home with 5% down will cost you about $38/month extra. Not a deal breaker, but it is a sign that it's a wise move to buy a home early this year before this number gets any bigger... and it will! Factor in the home price increases throughout the year with the higher rates and you could save a fair amount by buying sooner than later!
You or someone you know buying a home this year? No obligations and no costs! Be prepared, the right way - call us today!
Ariel Kormendy | Adrian Trott
1 (800) 617-0090
Century 21 Miller Real Estate Ltd., Brokerage