Be sure to add an extra $60 a month to your estimated mortgage payment.
How do RBC’s new mortgage rates affect you if you’re looking to buy a home in Burlington, or any other city in Ontario? It’s significant enough to raise your monthly payments by $60.00 on a $400,000 mortgage amortized over 25 years, according to Ratehub.
As of November 2016:
- A new RBC five-year mortgage with an amortization period of 25 years or less will cost 2.94 per cent, up from 2.64 per cent
- The three-year and four-year rates for these mortgages will go up 2.69 per cent and 2.79 per cent, respectively.
- For mortgages with amortization periods longer than 25 years, the annual cost of a five-year mortgage of this length will rise 40 basis points – a basis point is 1/100th of a percentage point – to 3.04 per cent.
- Could This Actually Be Fallout From President Trump?
You may joke about people picking up and moving in droves to Canada. That’s not what’s raising the rate, but The Donald’s win has already been linked to changes in the Canadian real estate market.
Banks are seeing lots of changes to lending rules, both from our government and the Office of the Superintendent of Financial Institutions, making it more difficult and more expensive to lend money to homebuyers.
According to The Globe and Mail, “As the banks wrestle with these rules, bond yields have also started spiking. Since Donald Trump was elected president of the United States last Tuesday, the five-year Government of Canada bond yield, which is used as a benchmark for mortgages, jumped 21 basis points to 0.96 per cent.”
Have Other Banks Followed Suit?
We have yet to see any of Canada’s major banks do anything drastic in response. However, we saw some more subtle changes leading up to RBC’s shift.
- TD Canada Trust raised its prime rate for variable-rate mortgages by 15 basis points, to 2.85 per cent from 2.7 per cent. Only customers with variable rate mortgages will be affected
- BMO also adjusted its variable rate for new loans.
If You’re Paying an Extra $60 Per Month, Make Sure You Get the House You Want!
With higher rates, it’s more important than ever to work with a Realtor who has experience navigating the housing market in Burlington, and knows how to get you the house that you want, for a price you can afford.
When you’re trying to squeeze all the value you can get out of every home-shopping dollar, choose to live in a city like Burlington. We were recently named the #1 medium-sized city in Canada, for the 4th straight year!
Click here to contact us to ask us any questions, or find out what’s available in Burlington right now!