26 Jun Covid-19 and the Canadian Housing Market
The new “normal” brought in by Covid-19, has made people question the future of real estate and whether or not they should be investing. While people might be nervous about travelling and even leaving their homes, it’s not stopping the real estate market from continuing its journey. In fact, Spring saw an increase in houses being sold, especially with mortgage rates as low as they are. So, the question many are asking is: variable or fixed rates?
For those planning to buy a house and taking advantage of the low rates, choosing the right mortgage program might be a confusing situation. But the current coronavirus pandemic might actually make the decision to choose one program over another a little easier. Considering the Bank of Canada’s rate cuts, fixed-rate mortgage rates are falling, making these types of home loans very attractive. Traditionally, variable-rate mortgages would offer borrowers lower rates during their introductory period. But these days, it’s not unusual for buyers to be able to lock in fixed-rates that are even lower than those of variable-rate mortgages.
So, here are the scenarios: go with a variable-rate mortgage if you manage to get a rate that’s lower than a fixed rate for the introductory period, are planning to move out of your home before the introductory period ends, or are not afraid of risk when the introductory period is over and the rate adjusts.
Go with a fixed-rate mortgage if you are well-qualified with a good credit score and low debt-to-income ratio, are planning to stay put in your home for the long haul, or like the idea of your mortgage rate remaining unchanged throughout the term of your loan.
Don’t forget we’re here to assist you. This may as well be the perfect opportunity for you to purchase a home.