Lower Rates and What They Mean for You
November 14, 2024 | Posted by: Keith Leighton
Lower Rates and What They Mean for You
Welcome back to our weekly mortgage market update for Atlantic Canada! This week, we have good news for homebuyers and homeowners alike, as interest rates have started to decrease. Let's dive into what this means for you, explore regional market trends, and provide tips for traversing this more favorable rate environment.
1. Lower Interest Rates: What’s Happening and Why
After a long period of high rates aimed at combating inflation, the Bank of Canada (BoC) has recently begun lowering interest rates as inflation cools closer to the target range. This change is a breath of fresh air for borrowers, with mortgage rates dipping slightly as lenders adjust to the new rate outlook. Though rates remain higher than the historic lows of recent years, these reductions could signal a more affordable path forward for buyers, refinancers, and those renewing their mortgages in the coming months.
For Atlantic Canadians, where affordability is a key advantage, the lower rates may offer even more room to grow in the housing market. Whether you’re considering buying a new home, renewing a mortgage, or exploring refinance options, now is an excellent time to review your mortgage plan with your broker.
2. Atlantic Canada Housing Market: Opportunities in a Cooling Market
In the Atlantic provinces, the housing market has remained resilient yet balanced, even as national trends show a cooling. While Halifax continues to see healthy demand due to migration from other provinces, smaller markets across New Brunswick, Prince Edward Island, and Newfoundland and Labrador are also benefiting from increased affordability as borrowing costs ease.
The recent rate cuts could give home prices a gentle boost, as more buyers are now able to qualify for larger loans and move forward with purchasing plans. This shift could especially benefit first-time buyers or those moving from more expensive provinces. However, inventory remains low in many areas, so if you’re looking to buy, starting your home search sooner could help you secure a property in what might become a more competitive market.
3. Mortgage Renewals: An Opportunity for Lower Payments
For homeowners with renewals approaching, this decrease in rates could be a game-changer. Those coming off a higher fixed rate from the last few years may now be able to lock in a lower rate, helping to reduce monthly payments and improve cash flow. With the current downward trend, it’s a great time to discuss renewal options with your broker, who can help you compare terms and select the rate that best fits your financial goals.
Some lenders may also allow rate holds, so even if your renewal is a few months away, it could be worth locking in a rate now to ensure you benefit from the recent changes.
4. Refinancing to Capitalize on Lower Rates
For homeowners interested in refinancing, now is an opportune time to explore this option. Lower rates can make refinancing more attractive, whether it’s for accessing home equity, consolidating higher-interest debt, or simply lowering monthly payments. With Atlantic Canada’s steady property values, many homeowners may have built up significant equity, making this an ideal time to consult with your broker about whether refinancing aligns with your goals.
Tip for Buyers and Homeowners
As rates drop, rate holds are becoming even more valuable. Many lenders allow you to hold a rate for up to 120 days, which could be a useful strategy if you’re in the early stages of house hunting or preparing for a renewal. Ask your broker about this option so you can lock in a lower rate now and avoid missing out if rates rise again.
Final Thoughts
Atlantic Canada’s mortgage market is looking promising with the recent rate cuts, presenting a prime time to take action—whether you’re buying, renewing, or refinancing. Lower rates mean lower monthly costs and more purchasing power, making it essential to connect with your broker and evaluate how these new conditions align with your goals.
Reach out to your DLC Ideal Mortgage expert if you have questions or want to explore your mortgage options in greater detail. Happy home financing!
