Mortgage rates are on the rise. While this is not really news since rates have scraped along the bottom for quite a long while now, the much bigger question is when they would start to rise and it appears the ascent begins now. Within the past few weeks several of Canada’s main banks have raised fixed rate mortgages from between 10 and 20 basis points, and of course the trend is for more of the same. For buyers who have sat on the fence, the golden age of cheap mortgage money is ending and a new phase of ever increasing rates begins.
For those thinking about making a purchase, it makes a lot of sense to talk to your mortgage broker to get pre-approved and get a rate “locked in”, meaning even if mortgage rates rise in the short term, the rate your mortgage broker promised you will be honored for usually between 90 and 120 days depending on who you did your pre-approval with. Your mortgage broker would be happy to provide more details.
Having a rate locked in while shopping for a property ensures you have a smooth search process with no unpleasant surprises. Knowing what you can afford before you put in an offer ensures you get the property you want when the perfect one comes along. Searching for property without being pre-approved can lead to disappointment if you find your dream home and then discover during the approval process that there are additional obstacles to getting your mortgage. Be prepared and get the best rate possible, so you can get the home you want for the rate you want! Forewarned is definitely forearmed
If you were to try to predict the Vancouver real estate market 5 years from now, it would be a total shock if mortgage interest rates weren’t higher – of course how much higher is difficult to predict – but it’s a very safe bet that they will be higher so if you have been waiting for that perfect “sweet spot” combination of low rates and the lowest prices possible, I would say there’s no time like the present… Happy hunting!