If you’re planning to buy a home in the near future, you’ll want to act sooner rather than later. The historically low mortgage rates that we’ve seen this year are set to disappear in 2016, and we won’t be seeing those rates again for some time.
Locking into a fixed rate mortgage now can save you thousands of dollars in interest later on – and help you find a house that you might not be able to afford when the market recovers. Here are just a few reasons why now is the time to buy if you want to save on a mortgage.
Recent Rate Cuts Benefit Buyers Who Act Quickly
The Bank of Canada cut its prime lending rate twice this year, once in January and once in July. Both times, the cut came as a surprise to financial analysts. And in late October, the central bank reevaluated its prime lending rate and chose to keep the rate at 0.5 percent. With lower oil prices dragging down exports and meager growth the past few years, the bank has been making a serious effort to spur consumer buying with rate cuts.
What this means for potential home buyers is that mortgages are easier to afford than they have been in the past. Fixed-rate mortgages are available for as low as 2.44%, down from 2007’s high of 7.39%. Variable-rate mortgages are also at historic lows, hovering around 1.99%, compared to a high of 5.65% in 2007. The Bank of Canada’s records show that today’s rates are the lowest mortgage rates the country has seen since before 1975, meaning over the last 40 years, there’s never been a better time to buy a home.
2016’s Economic Rebound: Better Conditions Will Lead to Higher Borrowing Costs
Last month, the Bank of Canada predicted that the economy will start to rebound by early 2016, with a full recovery complete by the first half of 2017. The bank also notes that the low cost of oil is driving down the natural resources market, while the rest of the economy is showing growth. And as time goes on, the economy will only continue to grow, driving up borrowing costs and leading to higher mortgage rates. We’ll start to see minor increases in early 2016, with rates returning to average in 2017. So if you want to lock in a historically low mortgage rate, the time to buy is now.
If you’re ready to find your new family home, you’re choosing to buy at a fantastic time. Here at Kirk Chamberlain and Associates, we can help you to find a beautiful new family home that you’re sure to love. Call us today at (778) 476-7778 to learn more.