Historically low mortgage rates are continuing to make homeownership affordable for Canadians, according to the Royal Bank of Canada.
Data from the RBC's Housing Trends and Affordability report shows that low mortgage rates are keeping Canadian homeowners from entering dangerously unaffordable territory. Additionally, the report stated that rate increases are likely not on the horizon.
"Exceptionally low mortgage rates have been the main factor preventing affordability from reaching dangerous levels in recent years; yet, we believe that the likelihood of a surge in rates is slim at this stage," the report stated.
Continued low mortgage rates are good news for Canadians, especially as a report from the Certified General Accountants Association of Canada shows that while many Canadians are satisfied with their finances, they're not necessarily keeping on top of them.
"While many Canadians appear satisfied with how much wealth they have, they can't necessarily put a dollar value on it," said Anthony Ariganello, president and CEO of CGA-Canada. "They therefore may overlook the need to make adjustments to their savings, borrowing and investing behaviours."
Fifty-one percent of respondents said they hadn't calculated their household wealth in a year or more, had never done so or couldn't recall ever doing so.
"Many Canadians are missing a golden opportunity to build some financial security for themselves during this time of low-cost borrowing," said Rock Lefebvre, vice president of research and standards at CGA-Canada and co-author of the report. "What people may not fully appreciate is just because you can take up to 25 years to pay off your home, doesn't mean you should or need to. In some ways, it's similar to making only minimum payments on your credit card."
The report makes an excellent point. With mortgage rates remaining near historic lows, Canadian homebuyers have a great opportunity to save on homeownership and focus on improving their finances.
Getting the best mortgage rates
It's important for borrowers to shop around when obtaining a mortgage. Lower rates can result in significant savings for homebuyers, so exploring all options is essential. One great way to find low mortgage rates is investing in a mortgage broker. These professionals are known for obtaining the best mortgage rates for their clients and can help borrowers throughout the home loan process.