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LET’S ADDRESS THE ELEPHANT IN THE ROOM: INTEREST RATE CUTS As buyers anxiously await the news of rate cuts to motivate their launch back into the market, there is reason to pause and review what that actually means. I spoke with Nick Shlyakhov of the Mortgage Architects to ask how much of an effect a 0.25% rate cut has on a buyer’s monthly payments. He explained that with a variable mortgage, this drop will only lower monthly payments by about $15/month for every $100,000 borrowed. The table below shows what your monthly payments would be if your mortgage was $100,000, your term length was 5 years, and your amortization was over 25 years: |
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The important thing to consider is what happens to housing prices when the rates drop? The market will heat up - buyers will be vying for homes, initiating multiple offers, and properties will be selling over the asking price. At the moment, housing prices have inched up 4.6% compared to last year. Sales have increased 9.6% and new listings have grown 20.3% as this optimism builds. The market is heating up. Contact us today to crunch the numbers before the change in rates and to get a jump on the market now. It is going to be an active year. Contact me today to get started! |
Dan discusses why there is reason to pause and review what rate cuts actually mean.
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