Fixed mortgage rates have been all over the place lately, but if you zoom out, they’ve been pretty steady since January. So why does this matter?
Well, for one, the current fixed rate directly impacts how much mortgage you can borrow and how you handle your monthly cash flow.
And secondly, most buyers are leaning towards fixed rates right now, so knowing where they stand can give you a good indication of where real estate prices might be headed.
Understanding these trends can be a game-changer before you dive into real estate investing and can seriously affect your long-term investment potential. So, let’s dig deeper into this.
Canada Policy Interest Rate Forecast
Now, let’s talk about the Bank of Canada’s policy rates.
They’ve been holding steady at 5% since last summer. According to bank forecasts, we might see rates drop to around 4% by the end of the year, with shifts possibly starting around mid this year 2024.
But here’s the thing: these predictions could easily change.
Check this out – banks have been cutting back how much and how soon these rate drops will happen – and that’s because the market is still confused and getting mixed signals from the latest economic data.
This is pretty much why fixed rates keep fluctuating and staying put.
How Interest Rates Affect Toronto Real Estate
Remember when fixed rates dropped sharply at the end of last year? That was a clear sign that Toronto real estate prices were going to climb.
Now that fixed rates are stabilizing, we’re expecting Toronto real estate prices to level off.
And historically, rents tend to follow the same trends as fixed rates, so we’re expecting rents to start stabilizing after they came down since close to end of last year.
So, to sum it up, Toronto housing is getting more stable, which is actually better for everyone. More predictability means you won’t get rich quick with real estate but it should never be that way to begin with because it’s just not sustainable – what goes up must come down, as we’ve witnessed.
But now we also cut down on the downside price risk, FOMO, and stress that comes with big price fluctuations, so we think this is actually a better recipe tor stable returns and long term success.
Check out a recent Toronto real estate investment deal we’ve been eyeing!
How We Can Help
If you want to dive deeper into specific Toronto real estate investment deals, reach out to our team.
We specialize in helping investors buy Toronto real estate just like the example here we can help you craft a solid plan for long-term success. Just go to the link below to schedule a chat with us!
