07/15/2022
My Buyer Friends, if you are getting concerned and anxious on rate increase. Please note, at the same time property price is going down. In order to understand what it means and how real estate is fail proof specially for primary property, see the scenario below:
Example:
Back in January 2022
Average Purchase price of town home in GTA: $1,250,000
20% down payment: $250,000
Mortgage amount: $1,000,000
5 years VRM posted rate: 2.45%
5 years VRM Flex floor rate: 1.90%
5 years VRM client rate: 1.90%
AM: 25 years
Monthly payment: $4,190.03
End of term mortgage balance: $836,126.52
Today July 14, 2022
Average Purchase price of town home in GTA: $1,000,000
20% down payment: $200,000
Mortgage amount: $800,000
5 years VRM posted rate: 4.70%
5 years VRM Flex floor rate: 4.15%
5 years VRM client rate: 4.15%
AM: 25 years
Monthly payment: $4,289.23
End of term mortgage balance: $698,794.48
Difference in monthly payment from January 2022 to current: $99.20 (4289.23 less 4190.03)
Savings on end of term mortgage balance: $137,332.04 (836,136.52 less 698,794.48)
Hence, today is presenting an opportunity to buyers and not a bad idea to do focussed property search and close a good deal if you find one.
Questions and discussions are welcome!!
