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I've talked to a few folks recently that are kinda sitting on the fence regarding the purchase of a new home.
 
One of the most important considerations in waiting is to consider mortgage rates. Today, someone with good credit can get a 3.69% fixed 5 year mortgage.  Lets compare that to a 6% mortgage which is what folks saw in 2006/2007.
 
The Jones family wants to buy a home around $400,000 with 5% down ($20,000). Lets estimate heating costs at $100 per month, property taxes at $1850 per month and monthly debts of approx $300. We will also calculate on a 35 year ammortization and include CMHC premiums.
 
At a 6.0% interest rate, the family income required to qualify would be $92,616.94. Monthly payments would be approximately $2770.
At a 3.69% interest rate, the family income required to qualify would be $71,667.56. Monthly payments would be approximately $2211.
 
Did you expect such a big difference?
 
If you have locked in a low mortgage rate, talk to your financial advisor/mortgage broker to understand your qualifications and payments should you let the rate go. While some folks believe the market will decline a bit more, others believe it is already on its way up so prepare yourself with the information you need to make your best decision.
 
As always, don't hesitate to contact me with questions. I'm happy to help early in the buying process to help you find your new home on your terms.
 
Cheers,
Monika

Numbers provided by Daryl Marsden, VERICO Canada Mortgage Direct

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