A home is likely to be the most expensive buy of your life. But with the current Canadian standard of living, it should be no surprise how much we use on where we live. Over the decades, the average home in Canada has undeniably gotten more luxurious and consequently more expensive. So to pay for an insulated and electrified haven from the wild, the average homebuyer relies on the financial assistance of a mortgage loan. But just as the modern home has improved, so have mortgage rates. The interest rates on mortgages in Canada are lower now than they have been for decades. For possible homebuyers, now could be an opportune time to invest.
That being said, a mortgage is never something a person should rush into, no matter how favourable the market is. There are plenty of factors to consider when calculating what kind of mortgage is best for you and they include financial conditions on both national and personal levels. With so much to explain, it is good to know borrowers can count on mortgage brokers to help put the pieces together and build the deal that is best for them. Mortgage brokers are people who have dedicated their careers to understanding the mortgage market and using that knowledge to help you. They work for the borrower, not the lender, so you can be assured they have your best interest in mind. By analyzing the marketplace and your financial situation, they can determine the mortgage rates, lengths, and lenders best suited for you.
Getting a good deal on your mortgage rate is not hard with the right help and it can end up saving you thousands of dollars over the time of your amortization period-the length of time it takes to pay back the loan. For example, if you pay back a loan of $200 000 over 30 years with an interest rate of 4%, you will end up paying an additional $142 000 in interest on top of your principal loan. But a decline of just 1% in that interest rate will save you $40 000. Mortgage rates are also compounded, usually on a monthly basis. This method the amount you owe increases with the time you take to pay it back. If you take that same $200 000 loan at 3% and pay it back 5 years faster, it would save you another $18 000. Compared to your original deal of 4% over 30 years, the new deal of 3% over 25 years makes your debt $75 000 lighter. With mortgage rates at one of their lowest points in Canadian history and financial counselling more easy to reach than ever, the present is truly a gift for prospective borrowers.
With an investment as important as your home on the line, it pays to be informed and prepared. Knowing the market trends and contacting a mortgage broker will help you choose between a fixed or variable rate, 10 years or 20 years, and all the other options you have as a borrower. But with modern mortgage rates so heavily in your favour, saving money is easy. The hard part now is choosing between the small town and the big city.