Should you wait for lower interest rates to buy a home?

Barb PInsent • July 23, 2024

Are you holding off on buying a home, waiting for interest rates to drop? Let’s break down the current situation and see why waiting might not always be the best idea.

Are Interest Rates Dropping?


Yes, interest rates are expected to go down by 2027, but the decrease in 5-year fixed rates is likely to be just 0.20%. This small drop might not make up for the extra costs of waiting to buy a home. Variable rates are expected to drop by about 1.75%. This might sound appealing, but it’s crucial to consider whether you’re comfortable with paying a higher rate right now compared to fixed rates.


  • Fixed Rates: These rates stay the same for a set period, usually 5 years. This means your monthly payments won’t change, making it easier to budget. Right now, a 5-year fixed rate is around 4.64%.


  • Variable Rates: These rates can go up or down with the market. They usually start higher than fixed rates but are expected to decrease until 2027. Currently, an insured variable rate is approximately 6%.


*Rates are for illustrative purposes only. They are subject to change without notice. This is not a commitment to lend, pre-approval or approval.

Real Estate Market Trends


The Canadian real estate market is strong, with home prices expected to rise by over $100,000 by 2027. Waiting for lower interest rates could mean paying much more for the same home in the future.


Let’s Compare Your Options


Here’s a look at the different choices you have:


1. Buy Now with a Fixed Rate


  • Pros: You lock in today’s rates, so your payments stay the same.
  • Cons: You might miss out on future rate drops.


2. Go with a Variable Rate


  • Pros: Expected to decrease until 2027, potentially saving money if rates drop further.
  • Cons: Initially higher than fixed rates, impacting the immediate budget.


3. Wait for Lower Fixed Rates


  • Pros: Rates might drop slightly.
  • Cons: Home prices are likely to go up, which could cost you more in the long run.


"The best time to buy a home was 20 years ago, the second best time is today." - Unknown

How I Can Help


Figuring out interest rates and market trends can be confusing. As your mortgage broker, I simplify the process and help you explore all your options. I will prepare all your options laid out next to each other so you can make an informed decision. Together, we’ll calculate your potential savings and find the best plan for you.



Take Action Now


Don’t let uncertainty about rates stop you from buying a home. Contact me today to discuss your options. Whether you prefer fixed or variable rates, I’m here to help you make a smart decision.

In Conclusion,


Buying a home is a big decision. It’s not just about interest rates—it’s about securing your future in a growing market. Understanding the differences between fixed and variable rates, and knowing the trends in home prices, can help you make the best choice. Get in touch today to start planning your home purchase with expert advice and personalized support. Let’s make sure you have all the information you need to make a wise decision in today’s real estate market.

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