With news of interest rates increasing and the spring buying season just around the corner, I caught up with Mortgage Broker Alex Lavender of the Clinton Wilkins Mortgage Team to get the answers to your most pressing mortgage questions.
1. What questions are you getting from borrowers?
The top question right now is what will happen with interest rates? If I had a crystal ball, I would be a rich man. There are a lot of predictions out there right now, but from the data we are seeing it looks like there’s an expected 1% increase in rates in 2022 followed by another 0.50% increase in 2023. As of March 2nd, we have just had the first rate hike in almost two years. It is expected that this is the beginning of the rate increases for the next two years.
2. How are rising interest rates affecting mortgages?
Rising interest rates have two effects; They can increase the cost of mortgage payments and they can also reduce the qualifying power for a mortgage. As interest rates increase, you will typically see an increase to the stress test rate as well, which is currently set at the greater of 5.25% or the contract rate + 2%. In terms of payment increases, every .10% increase typically increases monthly payments by $5 per $100,000 of mortgage debt.
For existing owners, this really depends on the type of mortgage product. If someone is in a fixed-rate mortgage and currently owns a home, the increased interest rates will not affect them until their term ends and they come up for renewal. At this time they would need to renew at the rates available in the market and that is when they will see an increase. For variable rate mortgage holders their rate can go either up or down during the term. Most mortgage lenders will either increase or decrease the payments when this occurs, but there are some lenders that will keep the payment the same.
3. Do you have any tips for first-time homebuyers?
The most important tip is to get pre-approved. Ensuring you can qualify is only one aspect of a pre-approval, you also need to ensure that you can comfortably afford the payments for that mortgage as well. I highly recommend you contact a mortgage broker of your choosing to assist with this, as they have access to a wide range of lenders that can search out not only the best rates but the best terms for your unique situation.
The second most important tip in this market is to not get discouraged. It is very competitive and I know firsthand how disheartening it can be when you don’t have the accepted offer on your dream home. It may take some time but if you are persistent there’s a very good chance you will finally land that accepted offer.
March Break In The Maritimes
Staying put this March Break? That doesn't mean it can't be an adventure! One of my favourite parts of being a REALTOR® is exploring neighbourhoods across the province, so here are my top picks for family-friendly March Break activities in Nova Scotia.
1. Downtown artwalk
Did you know there are over 20 Murals located in Downtown Halifax? A self-guided tour of these murals and other public art pieces can be found on the Downtown Halifax Business Commission’s website.
I recommend starting your exploration at 5151 South Street where you can pick up one of Rousseau Chocolatier’s famous house hot chocolates before heading North to the downtown core. Make sure you have your camera ready!
2. Alderney ferry
Looking to make a day trip from Halifax? You can hop on the Alderney Ferry for free between March 14th to 19th and arrive in Downtown Dartmouth. I suggest lunch at Humble Pie, Canteen or Portland Street Creperie before checking out the 15 public art pieces on the Downtown Dartmouth Art & Selfie Walk.
3. The Board Room Game CafE
Weather not cooperating? Check out The Board Room Game Cafe. Located on Barrington Street in downtown Halifax, it features a large gaming area with a collection of 600+ games to play, an espresso bar, local craft beer and soda, a tasty menu, AND an extensive retail area. The retail area opens daily from 12-5, cafe open Thursday- Sunday 12-12.
4. Art Gallery of Nova Scotia
The Art Gallery of Nova Scotia will be open for extended hours —March 12-20, consecutively— over March Break. You can explore their current collections including Witnessing: Alicia Henry, which is running from March 12th to May 22nd, alongside their extensive regular exhibitions.
5. Peggy’s Cove
The winter is the perfect time to enjoy this iconic Nova Scotia tourist attraction without all the crowds! Bundle up and head out to watch the waves and explore the rocks. On the way, stop by the new coffee shop/café Labour Day Picnic Café located at Paul’s Hall in Glen Haven. Grab a soup or sandwich off their “Lunch(ish) Menu” or a coffee and a sweet treat from Lure Caramels for the road.
6. Overnight stays
Make the most of winter on the Cabot Trail! Snowshoe by day, then curl up by the fire and watch the stars in a spectacular dome skylight. Cabot Shores has packages that include meals, snowshoe rentals, yurt or chalet accommodations, outdoor hot tub access, and a morning meditation or Qi-Gong session.
The Prince George Hotel
Treat your whole family (Dogs included - they have pet-friendly suites available) to a bit of luxury at The Prince George Hotel. Pretend you’re someplace sunnier and take your staycation poolside (indoors.)
Real Estate Advisor based in Halifax, Nova Scotia. I help people buy and sell homes with Engel & Völkers.