Vancouver and Rates??
What is going on in this city??? 
Well, I think we are all going to survive this great recession!
House prices, yes they do continue to drop. 13.5% down this February from last in the lower mainland on average. Interest rates continue to drop as well. Prime is now at 2.5%, the lowest in modern Canadian history – amazing. The BOC is trying to kickstart the economy by lowering interest rates, so stay tuned to see how it works. I don’t think it will hurt that’s for sure. It’s arguable that now is the best time to get a mortgage. Currently 3 and 5 year fixed rates in the vicinity of 4% which is quite excellent. These will likely go under 4% if the trend continues.. which is great for first time buyers. What a low interest rate does is lower your mortgage payment substantially. The difference in payment between 4 and 5% is about 20%. In other words if you are currently paying $2000 a month on your mortgage you may be able to refinance and only pay $1600 per month.
Is it worth refinancing at the moment? If you are currently in a fixed rate mortgage over 5% then it probably is. However, contact your existing lender first to find out what your penalty (payout) is. If the savings outweigh the penalty then it’s a good move and will carry you through the next 5 years and save you $.
Where do we go from here? Well, it’s a buyers market and house and likely will continue to be for another year or two (my prediction). There is no perfect time to buy a condo, but with low rates and lower prices this could be the time. I believe there will be tremendous buying opportunities right through the 2010 olympics.
As always – call me for more information, and yes, use a mortgage broker (not your bank). Have a great day!
Btw – I am now also offering equipment leasing through DLC. Contact me for more info.
