As a prospective homebuyer, my advice is to get pre-approved for a mortgage with a 120-day rate hold. If and when interest rates do rise, your rate won’t be affected.
As a home owner, if you have a variable-rate mortgage, consider locking in your interest rate now. It will cost you more initially, because a locked-in rate is always higher than a variable one, but you’ll be on the winning end when rates start to climb. Remember, always seek the advice of a mortgage professional if you are thinking of a locked-in versus variable rate.
Stay tuned for the Bank’s next announcement on January 17. In the meantime, remember that a home is a good long-term investment. No other investment vehicle out there allows you to buy something, use it, and still gain appreciation value. Other than a blip in the early ’90s, Toronto has seen price appreciation since the mid-1960s. It’s really a no-brainer – buy what you can afford, stick to your budget, and don’t worry too much about short-term doom and gloom.
Is the GTA in a housing bubble? No. The market fundamentals are too strong, with limited inventory, a great local economy, and our GDP hovering at a high. The GTA’s population is expected to grow by almost three million people by 2045. All of these factors will contribute to a healthy real estate market for years to come, despite rate changes by the BoC.