For many, owning your own home is the dream, but as interest rates rise, the question arises whether to buy or rent.
Geoff Walker of Walker Real Estate Group says it’s a deeply personal choice based on your own finances and circumstances.
Walker says renting can help cut costs.
He says that currently, a $600,000 townhouse with a minimum down payment could cost you upwards of $3,350 per month. On top of that are the property taxes, interest, and maintenance costs associated with home ownership.
Walker says, as it adds up, for some, it may be better to rent now.
“There’s a bit of a feeling that renting is ‘less than,’ when sometimes renting can get you going,” he explains.
The realtor says if you want to buy, plan to be in the house for a few years to see your return and focus on affordability, especially as everything gets more expensive.
“I think you have to choose the right mortgage product very carefully,” he explains. “I think we’ve seen these types of buyers who have had these adjustable rate mortgages, where now all of a sudden (they) have a bit of a pinch in their monthly payment, and it’s a crunch, don’t can’t it? It can really have an impact.
One of the benefits if you’re looking to buy is that you have more bargaining power than in years past, according to Frank Napolitano of Mortgage Brokers Ottawa.
“Granted, now that you’re looking to bid on a house, you won’t have to go over the list price of $50,000 or $100,000,” says Napolitano. “You’ll probably get it very close to list price or, in some cases, even below list price.”
Napolitano says that with some forecasters warning of a recession in the near future, some may want to wait.
“If interest rates can come down a little bit and get back to a traditional level between 3% and 4%, then I think you’ll start to see younger Canadians feeling better about buying property at this time. there,” he explains.