Lowest Mortgage Rate of All Time Hits Canada - Winnipeg Reacts
December 7, 2020 | Posted by:
Each month we have been reporting that mortgage rates have been hitting all time lows. These “lows” have had somewhat loose definitions mind you, being wrapped in a few caveats. But three days ago (at press) it was reported that HSBC released a variable rate mortgage at 0.99 percent. There’s no disputing the fact that this is a record-breaker across the board.
That’s right, for the first time in recorded Canadian history a mortgage rate has fallen below the unthinkable (for lenders) 1%. Here’s what Winnipeg buyers need to know.
What Winnipeg Buyers Need to Know About the Lowest Mortgage Rate of All Time
Offered to High-Ratio Insured Mortgages
At less (or even around) 1% lenders don’t have all that much to gain. But to protect their interests the historically low rate is being offered to those buyers with less than a 20 percent downpayment and have their mortgage insured. The offer is for a five-year closed term (may vary up or down over the period) which is tied to the bank's prime lending rate - a rate that has held steady (and low) through 2020.
Winnipeg Buyers Are Scooping Up Properties in Record Numbers
It may not be a surprise that low mortgage rates have resulted in real estate sales increases, but what has caught industry speculators off guard is that the trend has persisted despite a global pandemic and recession. In fact, home sales in Winnipeg have been record-breaking through the last five months and the same is expected for the final month of the wildest year in our history.
Winnipeg’s reaction to 2020 has been BUY, BUY, BUY. While there is uncertainly all over the world, confidence in Winnipeg real estate has not faltered one bit.
Winnipeg Sellers Are Getting a Premium
Despite the economic recession buyers are still willing to pay a premium, and sellers are therefore getting top dollar for their properties. This is because mortgage rates have been so low that buyers can look passed the surface price tag. With the reported variable rate dropping below 1% this pattern will continue. Even when rates climb back - which will invariably happen in 2021 - they will remain low enough to keep buyers interested. With a halt in new residential developments and lower inventory sellers will still get their asking prices.
What’s happening with Winnipeg real estate is honestly a perfect world scenario (all things considered) for buyers and sellers. Lenders and big banks may not love what’s happening but YOU most certainly do. But now that economic projections for 2021 are looking good you will want to act now. At the very least get the conversation going with a trusted mortgage broker. Contact Ron Chan today at 204.290.9950 for a friendly conversation about this unparalleled opportunity.
