October Update: Mortgage Market in Review
October 18, 2024 | Posted by: Keith Leighton
October Update: Mortgage Market in Review
As the crisp autumn air sweeps across Atlantic Canada, the real estate market in provinces like Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador is still as dynamic as ever. For homebuyers and homeowners alike, this is a key time to assess your mortgage options, especially with recent changes in interest rates, government programs, and housing market trends. Whether you’re a first-time homebuyer or a seasoned investor, here are some of the top considerations for your mortgage decisions this October.
1. Current Interest Rates: What to Expect?
As of October 2024, mortgage interest rates in Canada are stabilizing but remain higher compared to a few years ago. The Bank of Canada has paused further rate hikes after a series of increases over the past 18 months, which is a welcome sign for buyers in Atlantic Canada. While fixed mortgage rates are lower, variable rates are seeing less fluctuation, making them an option worth reconsidering for certain buyers.
For many, the question now is whether to lock in a fixed rate or opt for a variable mortgage. Fixed rates offer peace of mind by locking in a consistent payment schedule over the term of the mortgage, while variable rates could offer savings if the Bank of Canada begins to lower rates in 2025, as some predict.
2. Housing Market Snapshot Across Atlantic Canada
Each province in Atlantic Canada offers unique opportunities and challenges in the housing market. Here’s a quick look at the trends for October:
Nova Scotia: Halifax continues to be the hottest market, with homes selling quickly despite rising prices. Demand remains strong, but the pace of price increases has slowed somewhat, providing a window of opportunity for buyers.
New Brunswick: Cities like Moncton and Saint John are experiencing steady demand, especially from out-of-province buyers seeking more affordable real estate options compared to larger Canadian cities.
Prince Edward Island: While PEI’s market remains relatively small, demand for waterfront properties continues to grow. With strong tourism and seasonal influxes, many buyers are looking for homes that can serve both as primary residences and vacation rentals.
Newfoundland and Labrador: St. John’s is seeing gradual recovery after a long period of sluggish growth. Buyers may still find good deals in this market, especially as oil prices stabilize and economic growth returns.
3. The Importance of Getting Pre-Approved
With the competition in many Atlantic Canadian cities remaining fierce, especially in urban markets, getting pre-approved for a mortgage is more important than ever. This shows sellers that you’re a serious buyer and can also help speed up the closing process. A mortgage pre-approval also allows you to lock in today’s rates, even if you don’t plan to buy for several months. This can save you thousands in the long run if rates rise further by the time you make your purchase.
4. Navigating Mortgage Options for First-Time Homebuyers
If you’re a first-time homebuyer in Atlantic Canada, there are several programs and incentives available that could help ease the financial burden. These include:
First-Time Home Buyer Incentive (FTHBI): A federal program that offers 5% or 10% of the purchase price of a home as a shared-equity mortgage to reduce your monthly payments.
Home Buyers’ Plan (HBP): You can withdraw up to $35,000 from your RRSP tax-free to use toward a down payment.
Provincial Grants: Be sure to explore grants and tax rebates specific to your province. For example, in Nova Scotia, the First-Time Home Buyers Rebate allows for rebates on newly built homes, which could help with closing costs.
5. Mortgage Refinancing: Is Now a Good Time?
If you already own a home and are thinking about refinancing your mortgage, October may be a good time to act. Refinancing can allow you to access the equity in your home for major purchases, renovations, or debt consolidation. Even with slightly higher rates, those who secured mortgages five or more years ago may find that the equity gained during this time of rapid real estate appreciation in Atlantic Canada makes refinancing advantageous.
Just be sure to carefully consider the potential penalties for breaking a fixed-rate mortgage early, as well as the closing costs associated with refinancing.
6. Autumn Mortgage Maintenance Tips
For homeowners, autumn is an excellent time to review your financial situation and ensure that your mortgage is still aligned with your goals. Here are a few tips to make sure you’re on track:
Review Your Mortgage Terms: Take the time to review your mortgage terms and rates to see if you could benefit from renegotiating.
Check Your Home’s Market Value: Many homeowners are sitting on significant equity due to recent market appreciation. Understanding your home’s current value can help you make informed decisions about refinancing or upgrading.
Budget for Winter Expenses: With winter just around the corner, it’s essential to budget for increased heating costs and potential home maintenance expenses, particularly if you live in rural or coastal areas.
7. Why Work with a Mortgage Broker This Fall?
Mortgage brokers offer the advantage of comparing a wide range of mortgage products from different lenders, ensuring you get the best rate possible. This is especially valuable in today’s fluctuating market, where there is no one-size-fits-all mortgage solution.
At DLC Ideal Mortgage, we understand the Atlantic Canadian market’s nuances and can help tailor a mortgage solution that fits your specific needs—whether it’s buying your first home, refinancing, or expanding your real estate portfolio.
In Conclusion
October is a transitional month for both the weather and the real estate market in Atlantic Canada. By staying informed about interest rates, housing trends, and mortgage options, you can make smart financial decisions that will benefit you in the long term. Whether you’re buying, selling, or refinancing, the key is preparation and partnering with a knowledgeable DLC Ideal Mortgage broker who understands the local market.
Ready to explore your mortgage options? Contact us today for a personalized consultation.
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