The Ontario real estate market has been a hot topic for the last few years, and we’ve seen some unprecedented times with house prices hitting record levels. With that being said, recent data shows that the real estate market has slowed down after the Bank of Canada’s last interest rate increase.
If interest rates continue to rise, fewer people will be able to purchase properties or afford their current mortgage. On the flip side, buyers may feel pressure to purchase a home or refinance their mortgage before interest rates get even higher. There is a lot of uncertainty with the rise of interest rates and nobody knows or can predict if there is an end in sight.
How do higher interest rates effect your mortgage?
The higher your interest rate, the higher your mortgage payment will be. You could be paying hundreds of dollars more for your mortgage payment if your mortgage is up for renewal this year, and if you are planning to purchase a home, while the home may be more affordable, you could be paying a higher interest rate. According to the CMHC (Canada Mortgage and Housing Corporation), there has been a 64.1% year over year increase in unabsorbed inventory (houses built, but not sold) between May, 2022 and May, 2023.
Interest rates play an essential role in the effects of the housing market. It is important as a home buyer/owner to pay attention to the rate increases and to monitor how these increases can impact home prices and mortgage payments.
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This WARDS LAWYERS PC publication is for general information only. It is not legal advice, nor is it intended to be. Specific or more information may be necessary before advice could be provided for your particular circumstances.
