A number of my clients have been asking questions about mortgages and what all of these announcements mean when buying property in Canada. We sat down with Mortgage Specialist Carina DeMedeiros to ask all your questions about interest increases, variable vs fixed, and more!
Interest Rate Increase
On June 7th the Bank of Canada announced an increase. Here were the key takeaways:
✨ Prime was increased by 25 basis points or 0.25%
✨ Variable mortgages will automatically increase
✨ Fixed Mortgages are not directly affected (but have seen an overall increase)
Amortization
As variable rates increase, banks have been adjusting amortization so their clients can afford the payments. If you’re on a fixed mortgage and your term is coming up, you may be able to adjust amortization to see a more manageable payment.
✨ Amortization- number of years it will take you to pay off your mortgage at the current rate
✨ Term- length of time for your current mortgage contract
Fixed or Variable
The most asked and debated question in the mortgage community- fixed or variable? The answer for this depends on your situation so its important to speak with a mortgage broker.
First time buyer perks
Yes! There are some perks for first time home buyers.
✨ First Home Savings Account (FHSA)
✨ Take up to $35,000 from your RRSP tax free
✨ Land Transfer deductions
Downpayment help from parents
A number of my first time home buyers are receiving gifts or loans from their parents in order to obtain a down payment for their house. Is this a good idea?
It can be hard to navigate this market, especially as a first time home buyer. I am always happy to find answers for my clients and chat about the details of the market. Contact me today!
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