mortgage rates Archives

FACTS TO KNOW WHEN SHIFTING FROM VARIABLE MORTGAGE TO FIXED RATE

Facts to know when shifting from variable mortgage to a fixed rate Some homeowners may be asking if they should lock in their variable mortgage rate now before it gets even higher later on, given that rates for variable mortgages are on the rise. It’s not a “foregone conclusion that everyone should be switching to fixed,” as mentioned by James Laird, co-founder of the website RateHub.ca, in an interview, despite the fact that variable rates are rising. 53% of Canadians picked a variable-rate mortgage in the second half of last year, according to a report published by Canada Mortgage and Housing Corporation in the spring. This is a significant increase from the 34% who opted for a variable rate in the first half of 2021. The survey said that while the tendency carried over into 2018, it appears to have levelled down in the context of increased interest rates. The great news is that there is no fee for homeowners to switch from a variable to a fixed rate. But the homeowner is obligated to stay with their current lender and accept the prevailing fixed rate. You simply won’t have time to look around. To switch to a fixed interest rate, you need to make a phone call to your lender. Laird stated, “They tell you, ‘Okay, our current set rate is this,’ and you’re kind of stuck with it.” Homeowners can only do a fixed-rate mortgage conversion if they choose a new term length that is longer than the one they are currently in the midst of paying off. A homeowner would have to move to a new mortgage term of at least three years if there are still three years left on the current term. Alternatively, you could choose to enter into a new five-year fixed-rate term. The one and only rule are that the mortgage term cannot be reduced by making the transition to a fixed rate. CMHC data shows that as mortgage rates have increased, the spread between them has widened. According to Ratehub.ca, five-year variable rates can be anywhere from around 2.50 percent to 3.35 percent, while five-year fixed rates can be anywhere from about 4.14 percent to as high as 6.04 percent. It’s great news that homeowners who wish to move from a variable to a fixed rate will incur no additional costs in doing so. However, the homeowner must remain with their current lender and accept the fixed rate now in effect. There won’t be any time for exploring. You must contact your lender over the phone in order to change to a fixed interest rate. As Laird put it, “They tell you, ‘Okay, our current set rate is this,’ and you’re kind of stuck with it.” A fixed-rate mortgage conversion can only be done if the new term length is longer than the one the homeowner is currently in the midst of paying down. If there are still three years left on the present mortgage term, the homeowner would be required to switch to a new mortgage term of at least that long. You may also renew your loan for an additional five years at a fixed interest rate. You can’t shorten your mortgage by switching to a fixed rate, that’s the only regulation. According to CMHC’s numbers, the disparity between mortgage rates has grown in recent years. Ratehub.ca reports that the range for five-year variable rates is roughly 2.50–3.35%, while the range for five-year fixed rates is roughly 4.14–6.04%. When it comes to homeowners, both experts agree that the decision between a fixed and variable rate should be based on individual risk preferences. Laird recommended a fixed-rate mortgage for anyone who doesn’t have a high risk tolerance. Also, if their monthly income is low and they don’t have much room in the budget to absorb any payment increases, a fixed rate is the better option. He also said that homeowners with a lesser home loan debt or who might need to break their mortgage contract might be better off with a variable rate. Laird explains that “if you’re paying down your mortgage quickly, the rate today is the most relevant because your amount is bigger today and is going to decline swiftly by next year,” making a variable rate mortgage a better option for people in these situations or who have a tiny residual balance. Another consideration is whether or not you plan to refinance your home in the near future; if so, you should keep your mortgage rate variable. The penalty for leaving a variable rate mortgage is far less than leaving a fixed rate mortgage if you plan on selling your home and relocating. According to Laird, variable interest rates have consistently saved customers money over fixed ones. Borrowers concerned about their ability to keep up with their mortgage payments if they select a variable interest rate may find it helpful to calculate what their payments would be with a fixed interest rate and then make their mortgage payments based on this higher amount, as suggested by Larock. That way, he explained, the homeowner can put all of the extra money toward the principal in one lump amount, and he or she will already have a safety net in place in case interest rates go up. Related posts. FACTS TO KNOW WHEN SHIFTING FROM VARIABLE MORTGAGE TO FIXED RATE by admin123 A transformation of Danforth Village neighbourhood by admin123 CIBC: Housing deficiencies linked to undercounted demand by admin123 April witnessed an increase of 8% in Canada’s housing starts by admin123 The Finalization of 10Block Studio’s Plans for Luxury Condo by admin123 A 69-Storey Stacked Tower is being proposed by Capital Developments by admin123

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An increase in fixed rates by lenders, brings them closer to 4.5%

Blogs / Amy / 8 October 2022 / 5-year fixed rates, borrowers, borrowing costs, Canadian household, fixed interest rates, fixed mortgages, Government of Canada, Greater Toronto Area, home sales, Homebuyers, house prices, household debt, households, interest rates, mortgage, mortgage rates

An increase in fixed rates by lenders, brings them closer to 4.5% The previous week saw a rise in bond yields, which led to an increase in the variable and fixed mortgage rates offered by lenders across the country. Rates on 5-year fixed mortgages have been increased by 20 to 25 basis points at major financial institutions such as RBC, TD, and BMO, which all currently offer uninsured rates of 4.39 percent. This change comes after a nearly 10-bps increase in the yield on the Government of Canada’s 5-year bond, which is the benchmark for 5-year fixed rates. On Friday, the yield on a 5-year bond reached a new 11-year high when it closed at 2.88 percent. Bond yields have increased by more than 165 basis points since the beginning of the year. According to the data tracked by Rob McLister, rate analyst and editor of Mortgage Logic, the average uninsured 5-year fixed-rate among national lenders is now 4.37 percent. This represents an increase from the rate of 3.92 percent a month ago. The rate on an insured, fixed-rate mortgage for five years with a down payment of less than twenty percent has increased to 4.14 percent, from 3.78 percent one month ago. This represents an increase from the previous rate. That means that fixed interest rates have increased by approximately 40 basis points in the space of just one month. To put this into perspective, an increase in the rate of 50 basis points results in a roughly $25 higher monthly payment for every $100,000 of debt when amortised over a period of 25 years. New borrowers and those renewing a mortgage are facing significantly higher rates compared to just a few months ago and potentially double for those renewing a mortgage. While this does not affect the majority of borrowers with fixed rates, it does impact new borrowers and those renewing a mortgage. Following the Bank of Canada’s next rate decision meeting on June 1, at which it is anticipated that it will raise interest rates by another 50 basis points (bps), variable interest rates are likely to surge once more in the wake of this development. This may cause the prime rate, which is the rate used to price variable-rate mortgages and lines of credit, to rise to 3.70 percent. Impact of rising rates on mortgage borrowers “As interest rates march higher—we expect the overnight rate to hit 2% by October, a projection that increasingly looks conservative—borrowing costs for Canadians will also rise, leaving the average Canadian household to spend almost $2,000 more in debt payments in 2023,” say economists from RBC Economics. “This will erode spending power, especially for the lowest-earning fifth of households which spend 22% of their after-tax income on debt servicing (including mortgage principal and interest payments),” they add. On the other hand, RBC reports that the pandemic contributed to an increase in the amount of savings made by households in Canada. According to what the RBC economists wrote, the pandemic may have increased debt, but it also left Canadian households with an estimated savings balance of $300 billion. That is an enormous safety net, sufficient to cover approximately one and a half years’ worth of payments on the total Canadian household debt. Impact of rising rates on home prices The most recent housing data showed a significant decrease in home sales during the month of April; however, house prices have remained stable across the majority of the country, with the exception of Ontario. In the Greater Toronto Area, home prices have decreased by approximately 6 percent on average, but they have decreased by as much as 22 percent depending on the type of property and the particular region. Since benchmark prices are frequently a lagging indicator, it is likely that there will be additional price decreases in the months to come. In a recent post on move smartly, real estate analyst John Pasalis, president of Realosophy Realty, wrote that”…tomorrow’s homebuyers are going to have a much harder time paying today’s prices if they were paying 5% on their mortgage compared to the low 2% range just a few months ago, and the high 1% range a year ago.” Pasalis pointed out that some people have argued that this isn’t a concern because many borrowers have been qualifying at a stress test rate of at least 5.25 percent, but he suggests that this is an oversimplification of the situation. The mortgage stress test is currently used to qualify borrowers at a rate that is either the buyer’s actual mortgage rate plus 2 percentage points or the benchmark rate, which is currently 5.25 percentage points.According to what Pasalis has written, as these are dynamic measures that will change as rates do, the stress test will also increase, which will result in a reduction in the amount of debt a buyer can take on. He goes on to say that the contract rate influences how much mortgage debt the borrower is willing to take on. “A buyer who qualifies for a $1M mortgage may be willing to take on that much debt when interest rates are 1.75%, but less so when rates are 4% because under the higher rate their actual mortgage payment would be roughly $1,100 per month higher,” he wrote. As a result, if interest rates continue to trend higher, Pasalis says he “would not be surprised if we see some downward pressure on home prices over the next 9 to 18 months due to homebuyers being unwilling or unable to pay today’s prices at tomorrow’s higher interest rates.” Although, he adds that any price decline would “likely be a temporary one due to long-term fundamental factors that have been contributing to rising home prices in the Toronto area.” Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly

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A hint on change in Canada’s ‘stress test’ rules before year’s end

Blogs / Amy / 8 October 2022 / banking regulator, Canada, Canadian banking, Canadian housing, Canadian housing market, Canadian lending industry, home prices, Homebuyers, housing market, housing season, interest rates, Mortgage brokers, mortgage insurance, mortgage practices, mortgage rates, Toronto Regional Real Estate Board

A hint on change in Canada’s ‘stress test’ rules before year’s end Mortgage brokers argue that given the slowdown in the housing market, the Canadian banking regulator should relax its “stress test” qualifying rate for mortgages and make it easier to qualify for a mortgage. This week, the Office of the Superintendent of Financial Institutions issued a statement in which it alluded to the possibility that it might make “adjustments” to its qualifying rate before the end of the year. A review of the qualifying rate is performed by the regulator and then communicated to the general public every December, in advance of the hectic spring housing season that follows the following year. This week, however, the office, which is an independent federal agency that is responsible for supervising hundreds of financial institutions and over a thousand pension plans in Canada, suggested that an announcement may be forthcoming before the end of this year. According to a statement released by the regulatory body on Thursday,“Throughout the rest of the year, OSFI continually monitors the Canadian housing market and mortgage practices, and may make adjustments at any point if necessary for the health of the Canadian lending industry.” Some people working in the real estate industry see this as a sign that the office ought to take action and, in all likelihood, will do so given the rise in interest rates that has occurred this year and the resulting decrease in home sales. The most recent statistics released by the Toronto Regional Real Estate Board indicate that the housing market in the region reached its highest point in the month of February when houses and condos sold for an average of $1.33 million. The average price in the region dropped to $1.25 million as a result of a number of factors, including the Bank of Canada’s decision to raise interest rates in April and the expectation that they will do so again soon. Despite this, prices are still 15% higher than they were at this time last year. “The market is softening, prices are coming down. They (OSFI) did the stress test to cool the market. They don’t need any cooling of the market anymore. It’s already there now,” said mortgage broker Kim Gibbons. In order to avoid having to pay for mortgage insurance, homebuyers are required by the rules to demonstrate that they are able to afford mortgage payments at an interest rate of 5.25 percent or their mortgage contract rate plus two percent, whichever is higher. Homebuyers who have made a minimum down payment of 20 percent are exempt from this requirement. They were implemented in 2016 and 2017 with the goal of reducing overall market activity and preventing buyers from feeling overly pressured by rising interest rates. According to comments made by mortgage brokers in Thursday’s edition of the Star, the current average interest rate for mortgages with fixed terms of five years ranges from 4.19 to 4.25 percent. A borrower would need to demonstrate that they are capable of paying an interest rate that is as high as 6.25 percent in order to qualify for a loan with the requirement of a two percent plus contract. Gibbons believes that this is unreasonable and that it “doesn’t make sense” given the current state of affairs. “As things stand now they have got to do something,” Gibbons added. “Clients are going to alternative sources of lenders, credit unions where you don’t have to do two percent above the contract rate to qualify. People can qualify with credit unions much easier,” she said. “The stress test takes away about 20 percent of your purchasing power. Not always, but that’s kind of the rule.”Mortgage broker True North Mortgage, headquartered in Toronto, and its chief executive officer Dan Eisner are both of the opinions that the Office of the Superintendent of Financial Institutions will step in before the end of the year. According to Eisner if the “If the current housing market continues on a downward trend in home prices, that will give a lot of headroom to OSFI to reduce the stress test rate and requirements for the contract rate plus two percent before the end of the year.” ”I wouldn’t be surprised if they just eliminate the contract rate plus a two percent portion of the stress test; it’s a bit too aggressive. It doesn’t make sense when the fixed rates are in the four percent levels,” Eisner said. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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Suburbs lead Canada’s housing boom as downtown falls behind.

Blogs / Amy / 8 October 2022 / Canada, Canadian bank, housing prices, housing supply, Market News housing market, mortgage rates, suburban properties, suburbs, urban regions

Suburbs lead Canada’s housing boom as downtown falls behind. Canada’s suburbs had an increase in home values that outpaced downtown areas during the pandemic, according to a new study. Many downtown businesses closing and people’s desire for greater living space are driving the rising demand for suburban properties, according to research released on Monday by the Bank of Canada. Proximity premiums associated with metropolitan regions, where land is limited and commutes are shorter, have been undercut by this shift in the housing market, according to the central bank. In most neighbourhoods, housing prices rose significantly during the epidemic, but the gain was particularly pronounced in the suburbs, according to the data. Canada’s suburbs and downtown districts had already been decreasing progressively pre-pandemic, but now the distance has shrunk significantly, the bank says. As an example, research by a major Canadian bank found that, on average, suburban residences sold for 33% less than those in the city centre in 2016. By 2019, the price difference had shrunk by 26%. In 2021, if the current trend continues, properties in the suburbs will sell for around 21% less than those in urban regions. According to a report from the bank, the difference in price between the suburbs and downtown districts has narrowed by around 10% in the past year. There has also been an increase in businesses reopening or transitioning to a combined working environment, wherein the staff is only required in the office part of the week. There have also been reopenings of services and amenities that had been closed during the pandemic like salons, gyms, and restaurants. Workplace changes and the reinstatement of downtown offices and businesses may have an impact on the housing market once again. Mortgage rates could be affected in suburbs because of the shift toward larger residences outside the city centre, according to the bank. According to the report, “if this preference shift is transient, the proximity premium could return partly to its pre-pandemic level,” the bank stated. In anticipation of rising local demand, a significant change in housing supply in more suburban locations could be particularly troublesome. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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Mortgage costs in Canada are on the rise, making renting a more logical option.

Blogs / Amy / 8 October 2022 / bond market, bonds, Canada, Canadian mortgages, Canadian real estate, Government of Canada, housing bubble, interest costs, mortgage lenders, mortgage rates, renting, united states

Mortgage costs in Canada are on the rise, making renting a more logical option. As a result of inflation’s effect on bond yields, the Canadian real estate market is undergoing rapid transformation. Mortgage rates are expected to continue rising, according to First National, one of the major non-bank mortgage lenders in Canada. An email was sent out to customers by Neil Silverberg, a senior analyst working for the lender. In the email, he explained how quickly yields have climbed and how this will affect ownership. As the market readjusts, it is anticipated that a greater number of Canadians will choose to remain in their current homes or may consider renting in the near future. An increase in mortgage bond yields by 1 basis point each day The yields on Canadian mortgages are climbing at a rapid pace. In order to drive home this point, First National describes how there have only been 139 days in this year. On average, yields for both the five- and ten-year Government of Canada bonds as well as the Canada Mortgage Bond (CMB) have grown by more than one basis point every day. Although Silverberg does not see yields remaining at this fast level, he does believe there is a possibility for further expansion. Increasing bond yields are pushing up mortgage rates significantly The rising returns on bonds have led to a significant increase in the amount of money available for home mortgages in the year 2022. According to the lending institution, the interest rate on a conventional mortgage with a term of five years is now 4.84 percent, up from 2.94 percent at the beginning of the year. According to Silverberg’s explanation, this represents an increase of over 200 basis points in a span of less than five months. This results in a considerable rise for borrowers who may already be operating at or near their financial limits. “If you had a mortgage totaling $1million with a regular amortization period of 25 years, monthly payments would have gone from $4,702 to $5,726 in a matter of months,” he said. More people will consider renting as a result of rising mortgage payments Higher mortgage payments will encourage more people to rent rather than buy. Borrowers will face higher interest rates as short-term rates reach non-stimulus levels. As a result, the loan principal is reduced while the interest costs are increased. Renting will become more attractive when the cost of mortgages and interest rises. Higher interest rates tend to lower property values, but it takes time for the market to respond. As a result, the number of persons interested in purchasing a property will decrease if housing prices fall. “Does a payment change of over $1,000 a month on a $1mm mortgage or $500 a month on a $500k mortgage get people thinking about renting instead? The answer is yes. This is especially true when mortgage rates move up faster than housing prices move down,” said Silverberg. Those with lower earnings won’t be the only ones whose attention will be drawn to the rental market by rising rates. Mark Kiesel, an executive at PIMCO and a specialist on bonds, mentioned a few weeks ago that he was thinking about renting instead of buying his home. He had previously sold his home at the peak of the housing bubble in the United States and bought another one at the bottom of the market. His decision to sell and buy was largely dependent on the bond market. While he is in the United States, conditions in both regions with regard to money and valuation are very similar. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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April witnessed a fall in home sales as mortgage rates increase

Blogs / Amy / 2 August 2022 / bank of canada, benchmark price, Canadian housing, Canadian Real Estate Association, fixed rates, Greater Toronto, home price, home price index, home sales, Homebuyers, housing market, interest rates, mortgage rates, mortgage stress test, single-detached homes, townhomes, Vancouver

April witnessed a fall in home sales as mortgage rates increase The Canadian Real Estate Association reported on Monday that rising mortgage rates caused a slowdown in the pace of home sales in April compared to the frenetic pace they started the year at. According to the findings of the association, the number of homes sold in May 2022 fell to 54,894 from 73,907 in April 2021, which was the month that the nation set a record for the number of sales in the month. Compared month-over-month, sales in April were down 12.6% when compared with sales in March; however, April still ranked as the third-highest sales figure ever recorded for the month of April, just behind 2021 and 2016. “The demand fever in Canadian housing has broken and, who would have thought, all it took was a nudge in interest rates by the Bank of Canada to change sentiment,” said BMO Capital Markets senior analyst Robert Kavcic, in a note to investors. According to CREA, a significant portion of the slowdown can be attributed to rising fixed mortgage rates, which have been on the rise since 2021 but have had a more significant impact in the most recent months. Over the course of one month, the association noted that the typical discounted five-year fixed rates increased by approximately three to four percent from their previous levels. The rate also has an impact on how well buyers perform on the mortgage stress test. This test used to require buyers with uninsured mortgages — borrowers who had made a down payment of at least 20 percent — to carry a mortgage rate that was either two percentage points above the contract rate or 5.25 percent, whichever was greater. The rate currently has an impact on how well buyers perform on this test. According to CREA, the stress test for fixed borrowers has recently moved from 5.25 percent to the low 6 percent range, which represents another increase of approximately one percent in just one month. “People are nervous. They are thinking, ‘if I take on this mortgage when mortgage rates are going up and the price to (live) is more, what is going to happen?” said Anita Springate-Renaud, a Toronto broker with Engel & Völkers. She observed that many homes were still receiving multiple offers during the previous month, but the typical number of offers was now between two and three rather than twenty. “For buyers, this slowdown could mean more time to consider options in the market,” said Jill Oudil, CREA’s chair, in a news release. It is possible that for sellers, this will necessitate a return to marketing strategies that are more traditional. This shift in sentiment was reflected in the number of newly listed homes, which fell by 2.2 percent to 70,957 last month from 72,557 in March. On a seasonally adjusted basis, this decrease was due to a decrease in the number of newly listed homes. The number of newly listed properties fell to 91,559 in the most recent month, which is a decrease of 10.5% compared to April 2022’s total of 102,294 listings. Despite the fact that the CREA reported a slowdown in sales and a reduction in the number of listings, Canadians spent even more money on homes than they did in 2021. In April, the average price of a home across the nation was just over $746,000. This represents a 7.4 percent increase from the average price of about $695,000 in April of the previous year. The Greater Toronto and Vancouver areas were not included in this calculation, which resulted in a $138,000 decrease in the national average price, according to CREA. On the other hand, when taking into account seasonal factors, the national average home price dropped by 3.8 percent from $771,125 in March to $741,517 in the most recent month. In the most recent month, the home price index benchmark price reached $866,700. This represents a decrease of 0.6% from the previous month, but an increase of 23.76% from one year ago and 63.96% from five years ago. The benchmark price was the least expensive in Saskatchewan, where it amounted to $271,100, and it was the most expensive in the Lower Mainland of British Columbia, where it was greater than $1.3 million. The housing markets in Ontario’s suburbs are the “shakiest” because of the way prices have dropped since their peaks in February, but he said that single-detached homes and townhomes appear to be cooling off the quickest. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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An increase in fixed rates by lenders, brings them closer to 4.5%

Blogs / Amy / 2 August 2022 / 5-year fixed rates, borrowers, borrowing costs, Canadian household, fixed interest rates, fixed mortgages, Government of Canada, Greater Toronto Area, home sales, Homebuyers, house prices, household debt, households, interest rates, mortgage, mortgage rates

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Mortgage costs in Canada are on the rise, making renting a more logical option.

Blogs / Amy / 1 August 2022 / bond market, bond yields, bonds, Canada, Canadian mortgages, Canadian real estate, Government of Canada, housing bubble, interest costs, mortgage lenders, mortgage rates, renting, united states

Mortgage costs in Canada are on the rise, making renting a more logical option. Read More »

Suburbs lead Canada’s housing boom as downtown falls behind.

Blogs / Amy / 1 August 2022 / Canada, Canadian bank, downtown districts, housing market, housing prices, housing supply, Market News, mortgage rates, suburban properties, suburbs, urban regions

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Low-interest rates are causing housing affordability problems for 80% of Canadians, according to a survey

Blogs / Amy / 31 July 2022 / home affordability, housing market, low interest rates, Market News, mortgage rates

Low-interest rates are causing housing affordability problems for 80% of Canadians, according to a survey During the outbreak of the pandemic, the Bank of Canada dropped its Overnight Lending Rate — which consumer banks use to determine their mortgage and line of credit rates — to a record low of 0.25 per cent to position the country for a strong economic recovery following COVID-19. According to a new report, low-interest rates, combined with Canadians’ desire for more space during lockdowns and stay-at-home orders, fueled housing demand, driving prices upward throughout 2020-21. National sales activity increased by 235 per cent between April of last year and March of this year, pushing the average home price up by 44 per cent. According to the results of the study, Canadians are increasingly dissatisfied with the notion that today’s cheap cost of borrowing makes it simpler to purchase a home. However, while 47 per cent of respondents agree that low mortgage rates have benefited home buyers’ affordability (a little reduction from February), 34.4 per cent of respondents disagreed with that assertion, representing a 12.1per cent increase from the previous month. Canadians, on the other hand, are unanimous in their belief that low mortgage interest rates are driving up the price of homes. 80.5 per cent of those polled said they agreed with that assertion (up 32.8 per cent). At the same time, 38.1 per cent of those who answered the survey believe that low mortgage rates have influenced their willingness to purchase a home. Canadians are increasingly concerned about affordability, with a significant majority of 77.2 per cent of respondents saying that property prices in suburban areas and smaller towns have climbed to “unsustainable levels.” This is a 25.4 per cent increase from when the issue was first posted in February. When asked what their primary concerns were when purchasing a home, respondents stated that affordability (78.2 per cent), participating in a bidding battle (70.3 per cent), and timing the market (51.9%) are the most important considerations. In addition, given that the national average home price reached $662,000 in July, an increase of 15.6 per cent year on year, potential buyers will need to have increasingly higher income levels to be competitive in the marketplace. According to the study, of those who indicated they are interested in purchasing a home (56 per cent), 50 per cent now have a family income of more than $100,000 per year. Twenty per cent of those surveyed earn more than $160,000 per year, with the remaining 32 per cent earning less than $100,000 per year. As the economy continues to reopen and firms announce their post-lockdown strategies, 7.1 per cent fewer respondents said they would continue to work from home following the end of COVID-19, bringing the total number of respondents who said they would continue to work from home to 29.7 per cent. An additional 24.2 per cent stated that they have a hybrid working arrangement, representing a 6.4 per cent rise over the previous year. Meanwhile, the number of respondents who are currently working solely from their workspace has stayed steady since the February survey results were released. However, even though many Canadians continue to work from home, homes with office space continue to be in great demand – albeit at a somewhat lower rate than it was in January. Following this, a total of 43 per cent of respondents reported that office space had become a more desired housing attribute, representing a decline of 15.9 per cent from the previous year. On the other side, 65.8 per cent of respondents indicated outdoor space is still at the top of their home-buying wish lists – however, this represents a 10.5 per cent decrease from the previous month. In light of the next federal election, which is less than a month away, and the pressing issue of home affordability, it will be interesting to observe how Canadians feel about the housing market in the months to come. Image Source: updater.com Related posts. Low-interest rates are causing housing affordability problems for 80% of Canadians, according to a survey by admin123 More vital than ever are residences with a backyard and an office by admin123 The rise in resale condo prices in the GTA isn’t what you’d anticipate by admin123 Condos in other parts of Toronto are more valuable by admin123 The rise in Demand calls for an increment in the average rent by 5% in Toronto by admin123 Five Ontario Cities that will Surprise you with their Low Property Tax Rates by admin123

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mortgage rates

FACTS TO KNOW WHEN SHIFTING FROM VARIABLE MORTGAGE TO FIXED RATE

An increase in fixed rates by lenders, brings them closer to 4.5%

A hint on change in Canada’s ‘stress test’ rules before year’s end

Suburbs lead Canada’s housing boom as downtown falls behind.

Mortgage costs in Canada are on the rise, making renting a more logical option.

April witnessed a fall in home sales as mortgage rates increase

An increase in fixed rates by lenders, brings them closer to 4.5%

Mortgage costs in Canada are on the rise, making renting a more logical option.

Suburbs lead Canada’s housing boom as downtown falls behind.

Low-interest rates are causing housing affordability problems for 80% of Canadians, according to a survey

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