Rising Interest Rates – What does it mean to you?

Published By: on September 14th, 2017 in Category Buyer Information, Nanaimo Real Estate
Published By: on September 14th, 2017 in Category Buyer Information, Nanaimo Real Estate

Last week the Bank of Canada raised their interest rates, again, by a quarter of a percent. Financial experts are expecting one more similar hike before the end of 2017.

Why are they rising?

Interest rates are rising because of Canada’s strong economy. Business is good. Low interest rates are meant to stimulate the economy and they have done their job.

The good news:

Rising interest rates mean greater return on investment dollars. For those who already own their own home and are living off their investments, they will be breathing easier.

The bad news:

We are still 3% below 2008 rates but with higher prices and higher stress tests. The stress test means that you must qualify for an interest rate that is 2% higher than what you will actually be paying. This is to protect consumers from getting caught paying more than they can afford if rates continue to rise.

If you are trying to get into the market, you need to lock in current rates before they rise again. Get a 3 month written approval from your lender. You’ll need to go through a full credit review in order to get a guaranteed rate. Then it’s time to shop!

Call us at Love Real Estate Group to help you find your new home. We’d love to help you through the process.  Call 778 557-5640