Wow, another record breaking month for Canadian home prices! The question is how much longer can the market and the public afford these increases? American housing prices are beginning to fall and it’s anticipated that the Bank of Canada will increase interest rates this July to deal with higher then expected inflation. That will certainly make it more difficult for first time buyers to get into the housing market.
We just changed from a variable rate loan to a 5 year fixed rate of 5.29% on our revenue property. One thing I have learned is that it’s always better to get a fixed loan with any revenue property that you intend on keeping to gain appreciation with. You may be paying a little bit more in interest, but it will save you some stress down the road if rates keep increasing to the point where your property is no longer profitable. Plus you can write off all interest you pay on your mortgage!
