Let’s talk about interest rates.  Like most things in life, seldom do they stay the same. Since roughly 2009, if your mortgage was variable you had the benefit of very low borrowing costs.  Back in the early 2000’s my first mortgage was $86k.  The payments were roughly $130 principal and $400 interest per month with roughly a 5.69% fixed interest rate. This was the norm before 2009.    Since then rates have been so low, that over time I have forgotten I used to pay more to interest than principal.

According to the source tradingeconomics.com,  the interest rates in Canada averaged 5.79% between 1990 until 2022 from a high of 16% in February of 1991 till a record low of .25% in April of 2009.  If you had a variable mortgage you have enjoyed extremely low rates and ultimately more money to spend on other things.

Starting in April/May of 2022 most of the real estate demand disappeared.  Realtors are back to holding open houses, and for sale signs are up for longer.    Depending on the products, fixed mortgage rates are pushing 5% +. Home prices have never been higher in most areas of Canada, and people are unsure of whats next.

Time for some perspective.  Interest rates, although high compared to the last few years.  Are actually just below the average of the last 30+ years. Gone are the unconditional and blind bids.  Once again you have time to actually look at the house before purchasing.  More selection.  Overall, a better buying experience.  The interest rates are always going to fluctuate, and we have to prepare for it. Talking to your mortgage agent will set you up for success for the long term.

Written by Derek Cole DLC Canuck Mortgage group Lic#12503