Prevailing interest rates aren’t the only one thing that can affect you or your mortgage in the future, however. Here are 4 other mortgage trends that may impact you tomorrow.
Don’t Expect Credit Unions to Offer Low Pricing Forever
Credit unions have recently used their greater flexibility to cut their mortgage rates and compete against the big 6 banks.
But their rates may soon be going up — and not just because of a larger trend of rising interest rates.
Critics claim credit unions are engaging in a price war — one that will ultimately not be sustainable.
If you’re thinking of taking out a mortgage with a credit union, then, you might think twice about the kind of experience it may be able to offer you in the future.
Your Next Property May Be Harder to Insure
As of May of this year, the Canada Mortgage and Housing Corporation is no longer offering mortgage insurance on second homes.
Mortgage insurance is necessary in many cases — including when you purchase a home with less than a 20 percent down — and newer regulations have been putting even more restrictions on uninsured financing.
This may mean you’ll have a harder time purchasing a property if you want to retain ownership over your current home, whether as a rental property or as a place for your children or other loved ones.
The rules even place restrictions on you if you’re co-borrowing on another mortgage.
But not all news is bad for borrowers…
Look for Discounts on Big Mortgages
Are you considering a property valued at 500,000 dollars or more? If so, you may be able to get a discount on your mortgage.
Earlier this month ICICI Bank started offering new discounts on high value — or “jumbo” — mortgages, in a move that may only become more common among lenders.
While 500,000 dollars may sound like a lot, it’s now only three times the average mortgage size.
The rationale behind these mortgages is relatively straightforward: Jumbo mortgages are not only more valuable, but customers who get them often buy in to additional offers and services.
Because of this, discounts on jumbo mortgages are only likely to become more common.
Intense Rate Competition May Also Keep Rates Low — or at Least Lower
It may seem like we’re contradicting our first point here, but the reality is that when it comes to mortgages, the big six banks are facing more competition than ever.
Not only have credit unions been offering more aggressive rates, but online mortgage lenders in a variety of forms have been giving Canadians more choices than ever before.
Canadians are also becoming more savvy when it comes to the competition.
While in the past banks served as the source not only of mortgages but also of mortgage information, now a free exchange of information on the web has made it easier than ever to compare rates and services.
Thinking in the Present
No one can predict what will come tomorrow, but if getting a mortgage is something you’re considering in the next few years, now might be your best opportunity.
A financial advisor can help you work through your particular needs and help you make the most of the present — as well as make sound plans for the future.