Bank of Canada Increased Borrowing Costs Again
On Oct 24th and indicated that more increases are on the horizon. Lenders immediately increased the prime rate to 3.95%. This is certainly not helping with mortgage qualifications nor housing affordability. Market conditions have made many borrowers and home owners feel a bit uneasy and it’s warranted given the policies introduced by our Governments over the past few years in their effort to collapse real estate prices.
The latest stats on real estate reports that sales are falling dramatically and inventory levels are rising significantly. Last month’s sales were 36% below the 10 year September sales average and the total number of properties currently for sale increased 38% compared to the same period last year.
It is a great time for investors and first time home buyers to consider a purchase. Many properties for sale across Lower Mainland have reduced prices and have been on the market for an extended period of time. This positions a buyer to pick up a great deal.
Existing homeowners should review their financial position now before things deteriorate further. It is a great time to consider refinancing to payout other debts and consider locking into a fixed rate term. Most mortgage borrowers elect to lock into a 5 year fixed rate; however; other terms can be considered such as a 3 year fixed rate offered at 3.64%.
One of the best ways for variable rate mortgage holders to beat increasing interest rates is to pay their mortgage as if it was a fixed rate mortgage. This will dramatically cut your interest costs over the mortgage term and its lifetime. Many lenders are offering variables as low as 3.15%.
Home owners considering selling their home should ensure they get the right advice and hire the right realtor. Not all realtors are cut from the same cloth. In my years as a realtor I’ve experienced many sloppy and reckless business practices. Hard work, honesty and integrity should be the top criteria when selecting your listing agent.