April 22, 2021
Despite the COVID-19 pandemic, the Bank of Canada sees a stronger than expected economic recovery hence is expected to raise the lending rate in the second half of next year, 2022.
Is it good news for the homebuyers? The answer is yes and no.
It is bad news for the buyers who are still waiting to get into the real estate market both as first-time homeowners and as investors but have not made up their minds.
Because if they still have to wait for next year they will be looking into paying higher rates compared to historically low rates these days.
It is even more likely, as the banks normally do, that the banks may increase their lending rate in advance in anticipation of the BOC rate hikes. So the hike in the bank rates starts to affect them even earlier than anticipated.
On the other hand, it is somewhat good news, especially for first-time homebuyers, as it may have some cooling effect on the ever-climbing house prices that is going on for over a year now and does not seem to have any other cooling effect in sight.
But again, it is a double whammy in the sense that they may be looking for some slowing down in the house prices, which may not come true due to many other factors, but on the other hand, they will be paying for higher monthly payments.
Besides, their affordability would also reduce due to the debt ratio the lenders calculate based on their earnings, liabilities, and the monthly payment they can afford.
Does it all sound complicated?
I can help you understand the current real estate situation and walk you through towards achieving your goal of having your dream home or find the best investment opportunities.
I can be reached directly at 416-908-5600.
Please pray for the safety of all and seeing an end to the COVID-19 pandemic soon.
#BeSafeAndHelpOthersBeSafe
A. Q. Mufti
Dir: 416-908-5600
E-Mail: info@aqmufti.com
Profile: http://www.aqmuftirealty.com/about_me/25723
Web: www.aqmufti.com
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