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  • Chad Eliason

Then & Now – Comparing Home Purchases from May to November

It can be easy to get caught up focusing on only one element of the housing market - but it's important you take a step back and look at the home buying picture as a whole. Have a look at this quick comparison, showing a home purchase in May of this year, versus November.



You’ll note that though interest rates may have risen over the last 6 months, the average benchmark price of homes has come down significantly. This shift means that your monthly mortgage payments are lower, and your qualifying income needed is less as well. There are a few more factors to focus on, aside from mortgage rates, to ensure you have an informed mortgage application and home buying experience.

DOWN PAYMENT

To get into the market, you’ll need a minimum down payment of 5% of the purchase price - or potentially more if the home you’re buying is over $500,000. To avoid needing mortgage default insurance, you’ll need to put 20% down. If achievable, this 20% down payment move could save you thousands of dollars in payments and interest over the course of your mortgage.


FIXED OR VARIABLE LOAN

Though we’re used to seeing variable mortgage rates lower than fixed rates, that is not the case for today’s market. Choosing the right mortgage comes down to your comfortability with risk, and whether or not you are prepared for potentially fluctuating mortgage payments. One benefit to choosing a fixed rate mortgage is the stability of consistent payments for the duration of your term, whereas a variable rate mortgage allows more flexibility in breaking your mortgage before it’s renewal. Ensure you review all of your options.


PRE-PAYMENT CAPABILITIES

Don’t forget to choose a mortgage product that suits your financial goals, now and in a more long-term mindset. Ask your mortgage professional which products will allow you to increase your monthly payments, make lump sum payments without penalties and which products will have larger penalties for breaking your mortgage pre-renewal.


Each mortgage and financial institution is unique, as are your real estate goals. There are a lot of things to consider when shopping for a home and choosing a mortgage that’s right for you. If you’d like to chat more about your big picture and getting into the Canadian real estate market, I’m always here. If you’re ready to see how much you could be approved for, you can head over to my online mortgage application and get started from the comfort of your own home.

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