Should you still buy Real Estate in Todays Market? – Montreal

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Are you waiting for everything to be just right before purchasing a home. Newsflash! While you are waiting for the perfect scenario, time is ticking, prices keep rising, and the artificially low mortgage rates are starting to creep upwards.  

Condo Building that's high up in the sky, very good for your first home if you secure low mortgage rates.

Is it still a good time to buy, absolutely! So… what are you waiting for? 

We have become so used to free money; that’s when the mortgage rates are so low, borrowers are barely paying any interest on their loans. Yes, we have been spoiled, but even where the rates find themselves today; it is still a bargain.

Ask around, rates have not always been this low. For example, in September of 1981, mortgage rates peaked at 21.46%. That’s not a typo. Currently, you can get a 5-year fixed rate mortgage for 3.79%.

Renting generates wealth for others. By renting, you are paying someone else’s mortgage. Picture this, if you live in a fourplex, owner-occupied, the owner receives 3 rents, which allows them to basically live in the 4th dwelling for free, and some. The rents pay for their apartment, the mortgage on the four-plex, the taxes, both municipal and school for all four, and there’s money to spare for the owner to keep investing.

Why are you creating value for others, when you could be creating value for yourself?

Are you saving-up for a down payment? Have you thought of using your RRSPs? Of asking your family for a loan? A 5% down payment is feasible, you just need to be creative.    

Even if you are still living at home, you can purchase a place, and rent-it out. We all want a nice car, but as you know, as soon as you drive it off the lot, it loses 30% of its value. A home is an asset, a car is a liability, an expense. Remember, it is all about creating value.  

Think of it this way: house prices will continue to rise, a mortgage shrinks, and the gap between the two is where you find your value. The longer this goes on, the greater the value. If you rent… again, you are handing this value to someone else.

Not convinced, listen to this episode of the Real Estate Show on CJAD. In this instalment, Terry & Merav spell it out for you. Terry even tells the story of his first real estate investment. Guess what, it was an owner-occupied four-plex.

Have questions, call us at North East mortgages. You are under no obligation. Let us help you make your first purchase.  

Martin Spalding

Mortgage Broker

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