The Bank of Canada recently announced it is holding its key interest rate steady. This is the third time in a row they have kept things unchanged, which signals that the economy is moving into a period of stabilization. For Vancouver homeowners, this “hold” offers a bit of predictability after the ups and downs of the last few years.
If you have a variable-rate mortgage, your payments likely won’t change for now. If you are looking at fixed rates, remember that these are influenced more by “Bond Yields” (the interest paid on government debt) than the Bank of Canada’s daily decisions. Right now, we are seeing a much more balanced market where buyers have more time to breathe and negotiate.
There are also new rules helping with affordability in BC. You can now get an insured mortgage (with less than 20% down) for homes priced up to $1.5 million. Plus, first-time buyers and those buying new builds can now use a 30-year “Amortization”—which is the total length of time you have to pay off your loan. This can help lower your monthly payments significantly.
Every buyer must still pass the “Stress Test.” This is a government-mandated check to prove you could still afford your mortgage if interest rates were to rise in the future. With more inventory currently on the Vancouver market, now is a great time to see how these new rules improve your qualifying power.
Buying a home is a big step, but with the right info, you can move forward with confidence.
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