The year is coming to an end and it appears the Government is done with significant regulatory changes that affect home ownership and mortgage lending in Canada. Their overall objective was to introduce measures intended to “cool” the housing market and introduce new “stress test” measures that ensure affordability in the future if rates do rise.
These new measures require you to qualify based on an interest rate that is higher than the rate you pay! They’re preparing for interest rate hikes, but are interest rates on their way up? Maybe not!
Inflation is the main catalyst for a rising rate environment. We appear to be in an age of no inflation. There are many factors for this but the primary one is that with the ever-increasing shift to globilization, the pressure for wage increases diminishes which has historically been the main driver for inflationary pressure.
Housing prices on the other hand have gone up over the last few years. Many would argue it has more to do with lack of supply of housing, especially in areas where people want to live as well as an increasing demand for housing.
However, regardless of whether real estate prices go up, stay the same, or even slightly go down in the short term, true stability and wealth will be created over time when you pay down your mortgage regardless of the value of your home at any given time. This is the ideal time for Canadians not only to buy their first, second, or investment property, but also for implementing strategies and options to pay down their mortgage faster and accelerate their wealth building potential.
Finding the right mortage that financially makes sense today and in the future is just as important as finding the right home. Call or message me today.