The Canadian real estate market remains unusual and uncertain.
Mortgage rates haven’t meaningfully dropped after the significant increases of recent years, and home prices remain high. This keeps many potential buyers stuck in a “wait-and-see” mode.
While monthly mortgage payments may look intimidating, putting your dream of owning a home on hold indefinitely is not always the best option. Sometimes the solution is not to wait for rates to drop, but to buy wisely right now.
Remember, once rates do fall, prices will likely rise immediately—so in some cases, it makes sense to take action before everyone else does.
Let’s break down how to approach buying strategically so you don’t overpay but also don’t get stuck with unmanageable payments.
1. Look at the real cost of ownership, not just the interest rate.
Many buyers focus only on the mortgage rate, but it’s important to calculate the total cost of ownership: property taxes, insurance, utilities, maintenance, and repairs. Sometimes a home with a higher purchase price but better energy efficiency or lower property taxes can actually cost less in the long run. Plus, rates will eventually go down, but your partially paid-off property will stay with you.
Tip: Ask your Realtor or mortgage broker to prepare a 5–10 year total cost of ownership analysis for you.
2. Consider alternative types of housing.
If a detached home in your desired area is currently out of budget, explore options like:
a) Townhouses — more affordable, often with a small yard.
b) Condos — lower entry price, though with a monthly condo fee.
c) Duplexes and triplexes — rent out part of the property to offset your mortgage.
This doesn’t have to be a lifelong compromise—sometimes 3–5 years is enough to build equity and move up to your dream home.
3. Use a “step-up” strategy.
Buying the “perfect” home right away can be costly. A more practical approach:
* Buy a property you can improve (cosmetic upgrades, layout changes).
* Increase its value.
* Sell it in a few years and use the profit as a larger down payment on your next home.
This way, you climb the “property ladder” without overpaying at the start.
4. Lock in your rate or choose a flexible option.
Some banks and credit unions offer a rate hold—the ability to lock in today’s rate for 90–120 days while you search (locking in doesn’t obligate you to buy). There are also hybrid mortgages: part fixed rate, part variable. This reduces risk if rates rise and offers savings if they drop.
5. Don’t be afraid to negotiate.
In a high-rate market, there are fewer buyers, which means more room for negotiations. You can ask for a lot: price reductions, seller-covered closing costs, credits for repairs, or appliance upgrades.
Sometimes these concessions can offset months or even years of higher interest payments.
6. Think 5–10 years ahead.
Buying a home isn’t just about “here and now.” Ask yourself: Will the area suit your family in the future? Does the neighborhood have potential for property value growth? Will you need to relocate for work or your children’s education?
Sometimes it’s wiser to buy a slightly smaller home in a promising neighborhood than the “perfect” home in a place with no growth potential.
Conclusion:
Yes, high mortgage rates make buying more challenging, but they don’t have to end your dream. With the right strategy, flexibility in housing type, and strong negotiation skills, you can find a home that makes you happy without wrecking your budget. And at the very least, you’ll stop paying someone else’s mortgage.
Scary?
Don’t worry — only the first 25 years will feel scary. Then you’ll get used to it.
Just kidding.
You’ll adapt almost immediately.
Questions?
Call me—happy to discuss your situation by phone or email. You’re under no obligation to buy until you decide you’re ready for this important step.
Serge Skyba
REALTOR® at Realty 7 Ltd, Brokerage
416 305 6525
serge@agent1.ca
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