How do new lower interest rates affect me?
We spoke with Saskatoon mortgage brokers Tawny Bley and Tyler Hildebrand on how the interest rate drop affects average Saskatoonian! Here’s what they had to say:
“The Bank of Canada’s recent decision to cut the overnight rate from 1% to 0.75% has had a far reaching impact on the mortgage market.
Prime Rate (the rate all ‘variable mortgages’ are linked to) was lowered from 3% to 2.85%. This overnight rate cut also created downward pressure on fixed rates, with a 5 year fixed at 2.79% widely available in the marketplace.
So – what does that mean for the average household? It means more purchasing power.
Right now, based on average Saskatoon household income about $87,410 (StatsCan), the average Saskatoon family has purchasing power of $496,000. (based on a rate of 2.79% and a 5% down payment.)
Given record-low interest rates, purchasing power has never been higher – and with rising inventories, now is a great time to be in the market for a new home.”
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