The Canadian real estate market is very dynamic, and much can change in a single year. It is important to stay informed about the latest trends, as this allows you to make better financial decisions and recognize windows of opportunity as they appear. If you haven’t been following too closely, this article will get you up to date and present you with all the crucial facts about Guelph Mortgage rates.
New regulations are in force
In 2016, the Canadian government enacted a new piece of legislation that tightens the controls of the borrowing industry. Payback periods were shortened, while the maximum value of the mortgage relative to earnings was reduced. While those measures may infuse additional security to the market at large, they could also make the path towards home ownership harder for younger people. It is imperative to get acquainted with the new regulations and learn how they apply to your situation.
The rates are going down – for now
Good news for anyone seeking a mortgage loan this year – interest rates are looking quite pretty at the moment. Most lenders are offering long-term loans at rates under 3%, while rates are down from 0.05 to 0.1 compared to last year on average. That means now is a great time to apply for a new mortgage or refinance an existing home loan under more favourable conditions. Since the rates follow supply and demand as well as other economic parameters, it is difficult to predict their movement for the rest of the year and beyond.
Home prices are going up – again
While financing has been available under very solid terms, the problem is that homes in Canada are getting increasingly expensive. Prices for real estate are at a historically high level due to very strong demand, and new properties in urban zones now typically demand a seven-figure investment. In some municipalities, notably Toronto and Vancouver, there is a chronic shortage of quality homes that is driving up the prices.
Variable rates are getting more popular
One of the more intriguing trends this year is that a larger percentage of home buyers than usual are accepting variable interest rates. With a stable macroeconomic forecast for the upcoming period, citizens are expressing some optimism regarding the future policies of the Bank of Canada. Of course, fixed rate mortgages remain the primary form of loans in Canada, but in the current climate, their appeal is not as strong as it once was.