Canadian Real Estate and Interest Rates #2

Not many people know that if you take out a 25-year mortgage with a 6.37%+ interest rate, in the end you will pay at least double the original price.
Lots of variable-rate mortgages are now around this number, and even fixed rates are not far behind.

Tha Bank of Canada has dramatically increased interest rates since my last post 1 year ago, but real estate prices in Canada are still crazy high:

Parking lot for $160k. Very close to elevator! Toronto is a funny city.
Source: 1 YORKVILLE AVE

 
It is hard to believe, but considering that the oil price is over $80 again, there might be more rate hikes in Canada.
As for me, I still enjoy the results of at least one wise financial decision: having a fixed 1.99% mortgage until 2026.

My home-made statistics of real estate availability in Canada show that it keeps improving in 2023 compared to 2021 and 2022.
Over 200k active listings is the highest number so far.

A 5% interest rate on Savings accounts is almost the norm now, many banks are offering 5.5%+ GICs, maybe they will be able to hit 6% eventually.
My only regret is that I bought some more stocks at the beginning of 2023 instead of holding cash.
I’m not convinced that it will be a soft landing and still expecting a hard crash. 🙂

One comment on “Canadian Real Estate and Interest Rates #2”

  1. Royal Bank of Canada, the country’s largest lender, disclosed that 43 per cent of its Canadian residential mortgages had an amortization period of longer than 25 years, as of July. That’s up from 40 per cent a year earlier, and just 26 per cent in January 2022.

    Toronto-Dominion Bank said 48 per cent of its Canadian mortgages had an amortization period of more than 25 years as of July, up from 35 per cent the year prior. Like RBC, it has experience a surge of loans being extended to more than 35 years.

    Source: Homeowner stress bursts into view in Canada banks’ mortgage data

    Checked my amortization, 14 years and 5 months.
    Phew. 🙂

    More thoughts on Interest Rates: The Triple Action of Interest Rates

    Reply

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