With mortgage rates at an all-time low and oil prices ominously floating around $50 a barrel, many Albertans in the real estate market or looking to get in are scratching their heads – to buy or not to buy?
“You’re going to hear different opinions, but in my view it’s still a good time to buy,” said Jeff Toews, mortgage broker with CML Canadian Mortgage Lenders.
“The five-year fixed rate of 2.69 per cent (2.05 per cent for five-year variable) out there right now is the lowest I’ve ever seen,” said Toews, stressing that people need to be mindful when purchasing their homes that it’s a long-term investment that can usually weather the storm as the market softens and comes back up. While Toews believes growth will slow down some, he believes even the higher end homes ($650,000 and up) will often see a slight decrease.
When it comes to fixed or variable, it’s a risk vs. reward scenario.
“Historically for the last 20 years, variable has always finished ahead of fixed,” he said, adding that there may be more security for first-time homebuyers or those on a fixed income to opt for the fixed rate.
A $350,000 fixed-rate mortgage at 2.69 per cent on a five-year term amortized over 25 years works out to $1601.20; the 2.05 per cent variable rate for the same length, amount and amortization period equates to $1492.03. Toews can be reached at 403-870-1323.
