the average selling price will rise 5.2% to $429,400 across the country. The strongest gains will be seen in Ontario, British Columbia, and Alberta. (Source: crea.ca, press release, “CREA Updates Resale Housing Forecast,” June 15, 2015; http://crea.ca/crea-updates-resale-housing-forecast-10)
“While the Canadian housing market remains strong and prices will continue to climb, the national increases are expected to be more modest,” says Bob Aggarwal, president of Canadalend.com. “This is great news for those looking to get onto the property ladder or move up. The only long-term concern is the risk of rising interest rates.”
Aggarwal explains that rising interest rates, not increasing housing prices, will have a detrimental impact on affordability in Canada. Today’s homeowners would struggle if their mortgage payments increased even slightly. More than a third of Canadian homeowners would face financial hardship if their mortgage payments increased by just 10%. Another 15% say they couldn’t accommodate any increases in their mortgage payments. (Source: globeandmail.com, article, “Many Canadians would struggle if mortgage payments grew slightly: poll,” June 16, 2015; http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/many-canadians-would-struggle-if-mortgage-payments-grew-slightly-poll/article24976435/)
Based on the national average selling price of $450,886 in May and a five-year fixed-rate mortgage of 2.59% with 10% down, monthly mortgage payments would be $1,880. While mortgage rates are not expected to increase dramatically in the near-term, it is inevitable that they will climb. As they inch higher over a period of years, it’s going to affect affordability for first-time buyers and move-up buyers more than changing home prices.
“With mortgage rates at historical lows, now is the perfect time for first-time home buyers, those looking to move up, or homeowners looking to refinance to take advantage of the industry’s most competitive rates,” Aggarwal concludes. “The independent, licensed agents at Canadalend.com can help those looking for a mortgage or refinancing to determine what kind of financial products are best suited to their financial and lifestyle needs; in both the current interest rate environment and in the future.”
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent, licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and addressing financing concerns. To learn more about Canadalend.com, visit their web site atwww.Canadalend.com .