MONTREAL, Oct. 25, 2022 (GLOBE NEWSWIRE) — The impending announcement from the Bank of Canada has many eager to see how much further the bank will raise the overnight rate. This comes at a time when steady increases in the variable rate in 2022 have clearly left many current and potential homeowners in a state of worry. nesto’s latest monthly report shows that 67% of shoppers are “just looking” and only 33% are “ready to buy”. This is a complete turnaround from the same time last year, when ‘just looking’ was at 35% and ‘ready to buy’ at 65%. The unease may also be felt in subject fixed rate mortgages; In September, we locked in the highest number of fixed rate mortgages since 2020 at 36% of our total. Seeing a decline in interest in variable rate mortgages throughout the year.
This data, representing consumer intent, is probably no surprise, as home affordability is a trending topic in the mortgage industry and when you look further, it’s telling: a person or household with a salary of $80,000 was eligible for a mortgage of $365,000 and can now only qualify for a maximum of $325,000*.
However, on the bright side, the market is not as competitive and has even turned into a buyer’s market in some areas, giving buyers time to inspect a home before buying, seize a home at a lower price and obtain a short-term contract. fixed rate mortgage that can be renewed at a lower rate sooner than the historically popular 5-year terms.
“For those looking to buy a home but are concerned about high interest rates, there are a number of strategies available to mitigate the impact of higher rates,” says Chase Belair, principal broker and co-founder of nesto , “nesto can help you navigate these strategies, for example a short term fixed rate mortgage that would allow you to renew at a better rate if rates stabilize in 2-3 years, incentives like Mortgage with 1% cash back from nesto that put money back in your wallet to help pay for closing costs and other living expenses.
*Based on a 20% decline on a 35% GDSR assuming the purchase price is $407,000.
About Nesto: Unlike other mortgage brokers or banks in Canada, nesto is Canada’s first digital mortgage platform, with core human expertise and a seamless, convenient, technology-driven real estate finance experience that’s streamlined from start to finish . Visit nesto.ca for more information.
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