How To Approach Rising Mortgage Rates as a Buyer - April 21, 2022
Ian Walterhouse
Thursday, April 21, 2022
How To Approach Rising Mortgage Rates as a Buyer
In the last several weeks, the Bank of Canada increased its key interest rate by 50 basis points on April 13, 2022, bringing the central bank's policy rate to 1.00%. This is the largest individual rate hike since 2000, and comes about amid soaring Canadian housing prices and inflation. While that news may have you questioning the timing of your home search, the truth is, timing has never been more important. Even though you may be tempted to put your plans on hold in hopes that rates will fall, waiting will only cost you more. Mortgage rates are forecast to continue rising in the year ahead.
If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.
How Rising Mortgage Rates Impact You
Mortgage rates play a significant role in your home search. As rates go up, they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Here’s an example of how even a quarter-point increase can have a big impact on your monthly payment (see chart below):
Source: thetruthaboutmortgage.com
With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Use that motivation to energize your search and plan your next steps accordingly.
The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a trusted lender, help you adjust your search based on your budget, and make sure you’re ready to act quickly when it’s time to make an offer.
Bottom Line
Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.
We would like to hear from you! If you have any questions, please do not hesitate to contact us. We are always looking forward to hearing from you! We will do our best to reply to you within 24 hours !