Random Thoughts ... Canadian Mortgages and Rates... Fact or Fiction
Fact or Fiction ... Mortgages rates have exceeded 20% in the past
Fact or Fiction ... Mortgages rates today are at or near the lowest they have been in over 40 years.
Fact or Fiction ... Variable Rate Mortgages are the most popular.
With all you hear in the press about mortgage rates combined with the fact that 60% of Homeowners have or require a mortgage I felt a little historical perspective was appropriate.
Sometimes
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We Forget How Low Today's Mortgage Rates Are historically speaking. It's a Fact ... Mortgages rates have exceeded 20% in the past In September of 1980 Mortgage rates hit an all time high of 21.45% Source: Bank of Canada Download PDF It's a Fact ... Mortgages rates today are at or near the lowest they have been in over 40 years. In the Last 40 Years Average residential Mortgage rates have only droped below 6% in the last 7 years ..... in 2003 through 2007 and then went above 6% again in 2008. Source: Bank of Canada Download PDF In 2009 and so far in 2010 Mortgage Rates have hovered consistently below 6% It's Fiction that ... Variable Rate Mortgages are the most popular 86% of Borrowers in 2009 opted for fixed rate Mortgages and the security of knowing what their mortgage payments will be for a fixed term over the Variable or Adjustable Rate Mortgage (ARM) at a lower rate |
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Clients constantly ask me how the rising interest rates will effect the sale of their home
They read the headlines and fear that buyers will not pay the new 'higher' rates,
My answer has been the same for the last number of years, compared to the 18 to almost 22% of the 80's what it costs to borrow now is nothing, it is almost like 'free money'. Buyers will still buy, a rate increase may slow the market down for a short time, but people still need to move for many different reasons.
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Kathy Clulow Sales Representative RE/MAX All-Stars Realty Inc.. Brokerage 905.852.6143
Each office independently owned and operated Not intended to solicit clients already under contract
Hi Kathy..Great Information for Home Buyers.
My thoughts are the rates need to be at the rates they are today..so Banks can Lend to Buyers with higher Real Estate Values..other wise we would need large down payments which would bring real estate purchases to a halt.
When Mortgages rates were 21% Houses we were selling homes here less than $50,000, 40 years ago in 1970 the mortgage rates where around 10% and house prices here were under $10,000 in Victoria!!
Fred - an interesting perspective however my immediate thought was, when did the world of finance ever think about the effect of rates on the little guy
Whoo hoo, I got them all right. Our first mortgage in 1981 was 18%. The next year 18.5%. I remember those high high rates.
Jenny - real estate sales and mortgage rates have a significant impact on the overall Canadian economy. With over 200,000 jobs created by home sales and purchases across Canada a rise in rates would have a negative impact on the economy that would affect the jos/incomes of people employed in the industries impacted by real estate purchases.