Understanding Mortgage Rates: Why Now is a Good Time to Buy

Mortgage rates are a hot topic. On the news or in conversations, talk of mortgage rates is everywhere in Canada. Understanding why these rates are top of mind for so many can help you make a confident and informed home-buying decision.
We spoke with Reza Shohreh and Sophia Yip from RBC’s Builder Development Department to get their take on the impact of mortgage rates on the current real estate market in the GTA.
Predicted Lower Interest Rates
A key factor making the current period favorable for buying a home is the anticipated decrease in interest rates. Lower interest rates mean reduced borrowing costs, making mortgage payments more affordable. This scenario is particularly advantageous for first-time buyers and those looking to upgrade their living situations.
Increased Marketing Activity
As interest rates drop, the real estate market often experiences a surge in activity. Many people who have been waiting on the sidelines for a more favorable economic climate are likely to enter the market. This influx of buyers can drive up competition and potentially increase property values, making it smart to act sooner rather than later.
Firm Mortgage Approvals
One of the significant advantages of securing a mortgage now is the benefit of firm mortgage approvals. As explained by Yip, RBC offers a firm mortgage approval where the interest rate is locked in, protecting you from future rate fluctuations. This means that even if market rates increase after your approval, your mortgage rate remains unchanged, ensuring predictable and manageable monthly payments.
For those investing in pre-construction properties, securing a firm mortgage approval offers another layer of financial security. If the value of the property increases from the pre- construction phase to the closing date, the approved mortgage rate will still apply. This stability can result in significant savings and a favorable investment outcome.
Why Buy Now?
The combination of predicted lower interest rates, increased market activity, and the benefits of firm mortgage approvals makes now the best time to enter the real estate market. As interest rates decrease, borrowing becomes more affordable, attracting more buyers and potentially driving up property values.