Letters to the editor
Mortgage rate wars are in full swing, opening lucrative possibilities for condo investors. There have been many surprises from lenders. We have even observed the return of interest rates as low as a 2.99-per-cent fixed rate for five years. Another incredible interest rate announcement came from a lender who offered a 1.99-per-cent variable rate for three years. The good news is there is no immediate sign this interest rate war is going to stop any time soon.
While sceptics continue to say interest rates are due to jump back to normal, from the experience of last five years we can confidently say this interest rate war is not going away permanently. We’re experiencing an increasingly competitive mortgage market and whatever the interest rate, there will be good deals available from lenders.
The Bank of Canada recently stated that the interest rate not going to shoot up for at least the next 18 months or so. This is a clear indication of the general trend in the mortgage market.
When the rates do start to edge up, investors don’t need to worry. There is a positive side to rising interest rates. A rise in interest rates reflects economic growth and a good showing in overall economic indicators. More jobs, higher wages and a rising demand for real estate are some of the indicators for such growth. Interest rates fall in times of recession, not in times of economic growth.
As an investor, both situations will offer some lucrative opportunities to make a better margin. While putting your money on condo apartments, you are benefiting from low interest rates and when interest rates, price and demands shoot up, you end up getting a higher value for your property.
Rakesh Babber is a real estate agent with Cityscape Real Estate Ltd., Brokerage specializing in delivering advice for condos in Toronto Downtown core and other locations within the GTA.