Interest rates have been dropping and another Bank of Canada announcement is scheduled for December 11. Economists predict another drop and likely continuous drops into the end of 2025. Often trying to time the market perfectly isn’t the best way to purchase a home However, your focus should be on buying the right home for you and start looking now!
Variable mortgage rates fluctuate with the Prime rate. Your regular mortgage payment amount remains constant but the interest rate will fluctuate according to market condition. This impacts the amount of principle you pay off monthly. Variable rates are predicted to be around 4% next Summer. Demand is likely to increase with further drops which can lead to low inventory and the return of bidding wars and inflated prices. There is a fair amount of Inventory today which gives you more to choose from and possibly more negotiation power. For those who are nearing retirement or thinking about downsizing. It is a great time to take some equity out of your home. For those that are thinking about purchasing and making a secondary unit there are great incentives including the Multigenerational Home Reno Tax Credit which gives up to $7500 to assist with the cost of renovating a residence to create a secondary unit.
First time home owners have multiple incentives including the First Home Savings account (FHSA) which is a registered plan which allows you to save to build/buy a qualifying home tax free (up to $8000 in contributions). The Home buyers amount allows you to claim up to $10,000 for purchase of a qualifying home if you meet conditions which results in a tax credit of up to $1500. The Home Buyers Plan (HBP) allows first time homebuyers to withdraw a portion of existing funds from their RRSP’s untaxed for a down payment as long as it is paid back over 15 years.
Get preapproved for a mortgage and contact a REALTOR to assist you in your home search.