No perfect time to buy
"I'm waiting to purchase until interest rates come back down". We are hearing this a lot lately. We don't know when or how low interest rates are going to go. In this volatile market it is hard to have a guess as to what the Bank of Canada is going to do. Do they even know? They have said inflation is stickier than they originally anticipated, so we might not be seeing dramatic drops like people are hoping for. We might even see another rate increase or two before 2023 is over. Here is a list of positive factors, whether you are purchasing or looking into refinancing.
Higher interest rates can lead to lower house prices. We have started to see a decrease in home prices since the spring. This is a sign that higher rates are working to bring down inflation, slightly.
Higher interest rates mean less borrowing power for people , providing a tamer real estate market for you. No more getting into bidding wars over the home you want.
Higher interest rates mean a smaller penalty to break your mortgage contract. If consolidating high interest loans or lines of credit into one payment on a lower rate, outweighs the benefit of your current rate, it might make sense for you to break your mortgage before the maturity date. It can make sense to pay a penalty and we can work with you to figure out the pros and cons of starting a new mortgage contract.
Higher interest rates can mean a greater return on fixed rate investments and high interest saving accounts.
Higher interest rates can slow down out-of-control inflation. Canadians are feeling more discouraged to borrow right now compared to the previous two years and more encouraged to save. With less money being spent, the hope is inflation can return to the target rate.