MONTREAL, Oct. 25, 2022 (GLOBE NEWSWIRE) -- The impending Bank of Canada announcement has many on the edge of their seats waiting to see how much further the bank will raise the overnight rate. This comes at a time when the consistent 2022 increases to the variable rate have clearly left many current homeowners and potential homeowners in a state of concern. nesto’s latest monthly report shows that 67% of buyers are ‘just looking’ and a mere 33% are ‘ready to buy’. This is a complete turnaround from the same time last year when ‘just looking’ was at 35% and ‘ready to buy’ was at 65%. The uneasiness can also be felt in fixed rate mortgages submitted; In September we locked in the highest number of fixed rate mortgages since 2020 at 36% of our total. Showing a decline in interest towards variable rate mortgages as the year goes on.
This data, representing consumer intent, is likely no surprise as home affordability has been a trending topic across the mortgage industry and when you look further, it’s telling: A person or household with a $80,000 salary used to qualify for a $365,000 mortgage and now can only qualify for $325,000 max*.
However, on the bright side, the market isn’t as competitive and has even turned into a buyers market in some regions, giving buyers time to inspect a home before purchasing, grab a home at a lower price, and secure a short-term fixed rate mortgage that can be renewed at a lower rate earlier than the historically popular 5 year terms.
“For those that are looking to buy a home but are concerned with the high interest rates, there are a number of strategies available to mitigate the impact of the higher rates,” Chase Belair, Principal Broker & Co-Founder of nesto says, “nesto can help you navigate these strategies, for example a short term fixed rate mortgage that would allow you to renew for a better rate should the rates settle in 2-3 years, incentives like nesto’s own 1% cashback mortgage that put money back into your wallet to help with closing costs and other life expenses.”
*Based on 20% down on 35% GDSR assuming that purchase price is $407K.
About nesto: Unlike other mortgage brokers or banks in Canada, nesto is Canada’s first digital mortgage platform, that has core human expertise, and a transparent, convenient, technology-first property financing experience—simplified from start to finish. Visit nesto.ca for more information.
Contact:
Alivia Massimillo
Email: alivia@nesto.ca
Phone: 516-398-2513
