Fixed Mortgage Rates have been slowly dropping since January while the Prime Rate (affecting variable rate mortgages) has dropped a few times since June. Fixed mortgage rates seemed to have levelled off in the last month or so and so we decided it would be a good time to look at what does the payment difference look like now versus back in January.
To look at this analysis we have created this chart based roughly on a payment per $100,000 as well as looking at payments based on the average $500,000 mortgage. Here is roughly what things look like.
Mortgage Payment Chart
As we can see, mortgage payments have dropped by roughly $100/month per $100,000 of mortgage. This is a significant drop ($500 on the average $500,000 mortgage).
In addition, because rates are lower borrowers are able to qualify for a mortgage easier as the stress test rate has also dropped by roughly 1.5%.
To put this in perspective, someone making $100,000 with 20% down and looking to buy a condo would have qualified for a mortgage of $450,000 in January. Based on todays rates they qualify for a mortgage of $530,000. This is a 17% increase in mortgage qualification which is also significant. **Subject to credit qualification.
Things look better today on the mortgage rate front than they did a year ago. We are all hopeful that rates ease up a little further however there is no guarantee of this at this point.
If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.
For more information on our mortgage products and your preferred Abbotsford Mortgage Broker please visit our website at www.ymscanada.ca.
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