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How Falling Mortgage Rates Can Help You Secure Your Dream Home

Are you a first-time homebuyer in Canada? Are you looking for a more affordable way to purchase your dream home? If so, you might want to consider taking advantage of the current low mortgage rates. Emily Miszk, an award-winning mortgage broker in Mississauga, explains why falling mortgage rates are a game-changer for Canadian real estate.

1) Easier Approvals

One of the most significant benefits of lower mortgage rates is that they make it easier to get approved for a mortgage. Most lenders require you to prove that you can afford a higher interest rate than the one you are applying for. This process is called "stress testing." Stress testing prepares you for potentially higher rates and protects the lender from over-indebted borrowers.

Lenders use the government's mandated stress test rate to calculate your theoretical mortgage payments. When rates are lower, your payment is lower, and you need less income to qualify for a mortgage. With a lower interest rate, you can afford a more expensive home without stretching your budget.

2) Easier Debt Servicing

Qualifying for a mortgage is one thing; making the payments every month is quite another. Even if you qualify for significant mortgage payments, you don't want them to eat up your discretionary income. Lower mortgage rates help you allocate more of each payment to the principal, so you pay off your mortgage balance more quickly. This way, you build home equity faster, and your mortgage payments consume smaller portions of your income.

3) Healthier Market Sentiment

Lower mortgage rates create positive consumer psychology. People expect falling rates to invigorate the economy, which helps real estate do better. Falling rates are economic stimulus, which boosts employment and incomes. This, in turn, encourages more people to buy homes, creating greater competition for available properties.

In low-interest-rate environments, investors also turn to real estate for higher returns than other forms of fixed income, like bonds or income funds. As a result, falling rates lead to a market upturn and greater demand for available properties, which can support home values.

4) Greater Flexibility

Falling mortgage rates also provide greater flexibility for homeowners. With lower rates, you can refinance your mortgage to access more favourable terms and conditions, such as lower interest rates, shorter terms, or more flexible repayment schedules. Refinancing can also help you access the equity in your home, which you can use to fund home improvements, investments, or other expenses.

If you're ready to take advantage of these benefits and secure your dream home, it's time to fill in a mortgage application for pre-approval today. With easier approvals, more manageable mortgage payments, healthier market sentiment, and greater flexibility, falling mortgage rates are a game-changer for Canadian real estate. Don't wait until rates go up again – act now to make the most of this opportunity! to start your quick and easy approval today.


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