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RBC Lowers Mortgage Rates – Inventory Rises in B.C. and Ontario

Today, Royal Bank of Canada announced that it will lower fixed, multi-year closed mortgage rates by ten basis points, effective August 17. There will be no change to six-month convertible or one-year closed mortgages.

In Canada, it is typical for one bank’s mortgage rate announcement to set off counter moves by competitors. Watch for other major financial institutions to follow RBC's lead.

Another story strafing across popular media today reveals a thirty percent sales drop in the Canadian housing market, skewed sharply by B.C. and Ontario. The Canadian Real Estate Association attributes this partly to a rush by home buyers to beat the implementation of HST in these provinces on July 1. 

The HST will likely hurt builders of new homes, especially in higher-end markets like Vancouver and Toronto; but it does not affect resale homes, nor will it add significantly to the cost of a new home under $400,000 in Ontario or $525,000 in B.C. Added purchase costs will, however, come to buyers in the form of HST on services related to the purchase of new and resale homes. Taxes on real estate commissions are borne by home sellers.  

This may be good news if you are on the hunt for your first mortgage.

Increased housing inventory – combined with efforts by major lenders to attract mortgage seekers – means that those previously shut out of the housing market, or perhaps recovering from job instability due to the recession, may have the break they need to own their first homes.

Calculate the lifetime cost of a mortgage and compare payment options using the CENTUM mortgage calculator.
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