Should I purchase a home while rates are low?
In just the past few months, the coronavirus outbreak has affected everyday life for BC residents. Public fears, events being canceled, reduced availability of healthcare products (and toilet paper). It has affected the economy enough that the Bank of Canada has done drastic measures and cut the bank rate by 50 basis points just last week. Through all this media and confusion, homebuyers are wondering if they should take advantage of this situations and look at purchasing a property while rates are at a all time low.
Interest Rates are at a low
After last week's rate cute by the Bank of Canada, the mortgage industry is taking advantage of the interest rates. Refinances are becoming more popular as many are looking to refinance their property ahead of their term, simply because the lower interest rates. Usually there is a penalty associated with refinancing before the end of your term but the rate cut helps individuals save more in the future.
Investment in Real Estate over Stocks
It's no surprise in the drop in the market in the past week. With stocks plummeting at a all time low, many investors are looking at a safer option to invest. While stocks have historically been known as a medium to high risk investment. The real estate market is known as a safe, but slow option for investors.
A new drive for First-Time Homebuyers
There has been an increase in first-time homebuyers these past few weeks as millennials are taking advantage of a new kind of affordability. A few factors that contribute to this different mindset are a rise in medium affordability buildings, better first time home buyers incentives, and the lower interest rates.
Keep in mind that the minimum downpayment in BC is 5%. On a $400,000 apartment, you're looking at a $20,000 downpayment. Even though you may have to get the high premium insurance, it's one step closer to become a home owner.
Rent in BC isn't cheap
We all understand that rent isn't fun, or cheap in BC. When you pay your monthly rent, you aren't putting that money anywhere else but your landlords pocket. If you decided to purchase a $400,000 with a downpayment of only 5% ($20,000), you would be looking at monthly payments a little over $1,4000 a month.
Wondering if taking advantage of the market is suitable for you? Please feel free to contact me anytime.