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Thinking about buying a home but nervous about the real estate market?


Here is a like for like comparison to shopping for a home in 2007 when the market was robust and it was a great time for buyers:


October 2007 Median Price: $495,000

5 year rate (2007): 5.75%

Amortization: (2007) 35 years

Monthly Payment: $2717.64 (25 year term would have a monthly payment of $3093.86!)

Remaining balance after initial 5 year term: 469,139.48 NOTE: remaining balance at a 25 year amortization would be $443,103.80


October 2012 Median Price: $526,500

5 year rate: 2.99%

Amortization (new rules): 25 years

Monthly Payment: $2488.94

Remaining balance after initial 5 year term: $449,937.10

Not only is the monthly cash flow BETTER buying today with lower rates and under the new rules of a shorter amortization, but you get to pay down an additional $19,202.32 in principal reduction on the mortgage. All this after purchasing today at a HIGHER Median Price point!

TSX -118.41 to 11,811.38   
DOW -28.57  to 12,542.38
Dollar +0.27 to 99.91
Oil -0.03 to 85.42
Gold -4.80 to 1,709.00
*these numbers have been taken from  www.tmxmoney.com  at 8:00AM EST
Canadian 5 yr bond yields markets -0.01400 to 1.30000  The spread (based on the 5 yr published rate of 3.29%) is within the comfort zone at 1.99% http://www.bloomberg.com/quote/GCAN5YR:IND  The rate of return on your bond, can be read through a yield curve, If the increase in bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise.  The comfort zone is between 1.90 and 2.10

Thanks to Callum Greig    
Franchise Owner    
DLC - Prime Mortgage Works Inc.


MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.