Canada; The 2nd Best Country In The World & Fixed Vs Variable Over The Last Two Years
According to a new report by US NEWS Canadas is the 2nd best, losing only to Switzerland. See the article for more information on what metrics were used.
Variable Vs. Fixed: Here’s How Mortgage Payments Stacked Up Over The Past 2 Years
Variable-rate mortgage holders have been at the mercy of the Bank of Canada over the past year and a half. Let's look at a comparison to illustrate the difference from a variable & fixed situation.
A variable-rate holder took out a five-year insured mortgage of $500,000 at a 1.25% in July of 2021, and another in which a fixed-rate holder took out the same mortgage at the same time, but locked in a rate at 1.99%.
The data shows that ten rate hikes in, the individual who had chosen a variable-rate mortgage has paid $23,579 more as of September 2023 in cumulative interest as compared to what they would’ve paid had the rate remained unchanged.
This means the variable-rate holder has had to shell out 63% more in total interest than the fixed-rate mortgage holder, and would have surpassed the total amount of interest paid by the fixed-rate holder by November 2022.
Half Of Canadians Think They Will Never Be Able To Buy A Home
According to a new report, 48% of non-homeowners think they will never be able to purchase a primary residence.
Meanwhile, just 17% of non-owners indicate that they are planning to buy a principal residence in the next two years.
Of the proportion of non-owners who still have plans to buy at some point in the future, 77% say they will have to adjust their purchasing plans given current interest rate realities, while 30% will delay their purchasing plans indefinitely.
The next three years will see a “wave” of mortgage renewals, with 19% of current borrowers expecting to renew over the next year, and 65% expecting to renew over the next three years. Unsurprisingly, 69% of mortgage holders express concerns that they will be renewing at higher rates. Only 5% of current mortgage holders are paying less than the amount required by their lenders.
Canada needs 3.45 million more homes by 2030 to cut housing costs as population grows, CMHC predicts
From CMHC - Canada needs 3.45 million more homes to bring housing costs down as the population increases. That’s in addition to the 1.68 million that are expected to be built by 2030 if the pace of construction remains the same. Current immigration pace could set that number at 4 million.