When you’re a young Canadian looking to purchase your first home, it’s all about affordability. Considering the huge price increases that some cities in Canada have seen over the last while, you would not be alone in thinking that it’s not possible to get into the housing market at these prices and that there aren’t any affordable places left in the country.

However, you should not always be led be what you hear and read. There are definitely some bargains to be found, both in home values and in interest rates.

In spite of the housing price increases, affordability is actually pretty good at the moment.

What does this mean?

Well, for starters, outside of major metropolitan areas, house prices remain relatively in check. However, what most neglect to think about regarding affordability is that it isn’t just about the price of the home. While that is obvious, what is also important is the mortgage economics. You could purchase a home for $100,000, but if mortgage rates are at 12 percent, it does not make the home affordable.

So, with this in mind, affordability is very good right now. This partly explains why the housing market is so strong. People are leveraging their down payment together with the low interest rates to afford a home within their means.

Low rates mean more affordability

Yes, we are in a period where we are experiencing the lowest rates in history. We want to be using about 30 to 35 percent, depending on circumstances, of family income to service the mortgage payment, property taxes and maintenance. This is becoming more and more of a possibility and reality for many Canadians and this is obvious from the home sales to first time buyers across our country.

Combine all this with intense competition amongst lenders to earn your business and you have a pretty good environment in which to purchase your first home.

But all these great deals do come at a price: With so much capital flying left and right in the real estate market, it’s more important than ever to ensure you are getting the most suitable loan for your needs. This is why it’s so integral that you remember to head to a mortgage broker when you decide to take advantage of the current strong affordability. There are plenty of expensive properties out there, but with an easy-to-service mortgage, those homes can still be yours!


Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

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