5 ways borrowers are affected by the unstable market..

This year, ever since the coronavirus impacted the global economy, Canada’s mortgage rates have been steadily falling. In some cases, banks are offering 1 to 5-year fixed rates for less than 2.00%. And since rates continue to drop, including a few record-setting lows, homebuyers are facing some major decisions.

If you’re considering buying a home during this unpredictable time, you’re certainly feeling the effects of today’s unstable market in Canada. Here are five ways borrowers can be affected by the falling mortgage rates:

1. Increased powerEven after you’re approved for a home loan, you might be tempted to continue looking for even better terms. Since rates are falling nearly every day, there’s a chance you’ll find a better rate just days before closing. And if you ask your lender to match the lower rate, there’s a good chance you’ll get it. Many lenders are adjusting rates to keep up with their competition.
2. Long-term savingsLenders saw their costs spike during the coronavirus crisis. Since they are finally starting to recover with reduced costs, they’re likely to pass along their savings to borrowers with even lower interest rates.
   For the foreseeable future, many economic forecasters predict banks will keep fixed and variable rates at or below their current levels. This could be the case for several more years. To maximise your savings, consider buying a home now and locking in the low rate.
3. Refinancing optionsFor borrowers who purchased their homes before the dramatic decline in interest rates, the current market can seem enviable and frustrating. You might be considering options to get out of your loan terms with a new loan and a lower rate. To make sure you make the smartest decision, consider working with a mortgage broker to calculate all your options for refinancing or staying with your current lender.
4. More competitionFalling interest rates have helped home buyers afford more expensive homes with a lower monthly payment. However, it’s also likely that fewer homes will be for sale during this unpredictable time. With fewer homes on the market, home buyers are facing more competition.
5. Lack of financial securityDespite the potential savings from lower interest rates, many homebuyers are still affected by the lack of job security caused by the coronavirus and an unstable market. If you’re vulnerable to job loss or reduced profits, you might find it more difficult to qualify for a home loan.

If you still aren’t sure how to proceed with your new or existing loan because of falling interest rates, you’re not alone. Give Amandeep Duggal a call to discuss your questions and concerns. Based on your current circumstances, he’ll help you see all your options and make the smartest decision for your long-term success.