In this episode, Natalie is joined again by mortgage expert Wendy Goodsir. They debate the current low interest mortgage rates and what that means for. real estate purchases and refinancing, both short term and long term.
There are two kinds of interest rates: fixed and variable.). With the Pandemic and current economic situation, we’ve been experiencing very low interest rates, close to 1.0%, instead of the average 3.5%! This has spiked a crazy buying market as people are looking to take advantage of “free money.”. Real estate markets in every Canadian province have exploded.
“Real estate is always a long term investment, never a short term to make money overnight.”
In turn, Natalie and Wendy offer some wise future market predictions. Buying anything on speculation is usually a bad idea and you should buy for what your life is now. Even on a 5 year mortgage, you need a 15-25 year plan. Understand 5 year cycles. That discounted borrowing will end, before your 5 year cycle does… and it will end before reality sets in.
So, enjoy the discounted rates. If you’re anticipating any life change, pretend you’re at a realistic rate of about 3% now and take the difference between what you’re paying right now and what that would be when rates renew. If it’s feasible,dump that difference into your savings account. There’s no way you’re going to walk through the next 5 years of your life without a major life change. Bank the difference!
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