By Sarah Mathieu April 13th, 2023
Interest Rate Update
I have some good news and…some good news! Yes, you read that right. On April 12th the Bank of Canada decided to hold the Overnight Rate at 4.50%, which means we won’t see a change in Prime Rate. Variable rate clients are thankful for the last two rate holds, which means no change to their principal and interest payments. What is the other good news? Fixed rates are coming down! With that said, we think it’s a great time to compare interest rates & home prices from March 2022 and March 2023.
This time last year 🗓️
This time last year, the benchmark price for a single family home in Kamloops was $711,100. In March 2022 many home buyers were just starting to get used to the fact that interest rates were on the rise. The going rate for a 5 year fixed insured mortgage was 3.84% at the end of March 2022. By the end of November 2022 rates were as high as 5.29% for that same mortgage.
What’s going on now? 👇
The Associate of Interior Realtors just released that the new benchmark price for that same home now, March 2023, is $622,400 (up $6,900 from last month). Just a few short months after the peak in interest rates, many lenders are now offering rates as low as 4.54%* for a 5 year fixed insured mortgage (as of April 13th, 2023). *Rates subject to approval and change without notice.
What does this all mean?
Have you ever heard of the saying “Marry the house, date the rate.”? This means that the good deal you get on a purchase price is forever and interest rates will vary. In short, prices hit a low in January and are now increasing. Interest rates hit a high in November and are now decreasing. With that said, it may be the perfect time to enter the housing market in Kamloops.
Let’s break it down ✍️
Would you believe me if I said it was $196/m cheaper to buy the same house today, than it was this time last year? Here is a comparison of purchasing a single family home in Kamloops March 2022 vs. 2023.
| March 2022 | March 2023 | Financial Difference | |
| Purchase Price | $711,100 | $622,400 | -$88,700 |
| Minimum Down Payment | $46,110 | $37,240 | -$8,870 |
| Default Insurance Premium | $26,600 | $23,406 | -$3,194 |
| Total Mortgage Amount | $691,590 | $608,566 | -$83,024 |
| 5 Year Fixed Interest Rate Term | 3.84%* | 4.54%** | +0.70% |
| Mortgage Payment | $3,578.16/m | $3,381.80/m | -$196/m |
*Based on insurable mortgage rates as of March 28th, 2022 **Based on insurable mortgage rates as of April 13th, 2023
Note: Table & calculations for illustrative purposes only. Rates are subject to change without notice. This is not a commitment to lend, approval or pre-approval.
Can You Believe The Savings?
When many people think about low interest rates, they think about the Pandemic. Purchase prices soared and interest rates plummeted. If there is one thing we learnt over the last few years is that the Real Estate Market is impossible to predict, though many agree that we may never see interest rates that low again.
Is Now A Good Time To Buy?
Many homebuyers have been waiting for real estate prices and interest rates to come down. January 2023 may have been the bottom of that downward trend with the benchmark price being $605,100 for a single family home in Kamloops. Interest rates continue to go up and down, though many economists predict them to hold steady throughout 2023 or decrease by the end of the year.
If you were waiting for a sign to enter the housing market, this is it. 🔮
By Sarah Mathieu
Mortgage Broker, 503055
For mortgage inquiries, please contact Luc Mathieu.
[ Mortgage Tech ] by BRX Mortgage
C. 250-320-5555
W. mortgagetech.ca
E. info@mortgagetech.ca
Free Purchase Calculator: CLICK HERE
Sources:
Association of Interior Realtors
