Variable-Rate Mortgages

Variable-Rate Mortgages

Mortgage / By /

Variable-Rate Mortgages Reach Trigger Rate

There was recently an article published in the Financial Post about the fact that variable-rate mortgages are now hitting their trigger rate. The article also talked about how this will effect Canadians financially and what to expect. Before we get into the details let’s learn a bit more about what exactly are variable-rate mortgages and fixed payments. The Bank of Canada explains this very well and what happens when variable-rate mortgages reach their trigger rate.

“In Canada, about three-quarters of variable-rate mortgages have fixed payments. For these specific mortgages, when interest rates move, the amount of the mortgage payment does not change, but the portion going toward interest (rather than principal) is adjusted. But if interest rates increase substantially, these mortgage borrowers may reach a point where their fixed payments cover only interest and not any principal. The interest rate at which this happens is known as the trigger rate. If rates rise above the trigger rate, borrowers may then need to increase their mortgage payment to cover the additional amount of interest. For some households, this payment increase may be unexpected.” — Bank of Canada 

It’s been indicated that higher rates are on their way, so what does that really mean for your mortgage rate? Well, if the rate was raised by say 0.50 per cent then you would see a $24 increase per month on your payment. Does that make sense? Let’s learn more about what the Bank of Canada says will happen since we’re now seeing these variable-rate mortgages reach their trigger rate in the Financial Post article. 

The Bank Of Canada & Variable-Rate Mortgages 

The Bank of Canada Senior Deputy Governor Carolyn Rogers announced that the adjustment to higher interest rates might be difficult for some Canadians with variable-rate mortgages. This was announced at a recent event in Ottawa to a networking group, they indicated that these variable-rate mortgages had an increase since last year. 

According to new research by the Bank of Canada, also included in the article by the Financial Post, variable-rate mortgages are accounting to one-third of the outstanding mortgage debt. This is an increase when we compare it to just a few years ago. 

The Senior Deputy Governor also said that mortgage costs have already gone up for most Canadians and that they’ll most likely see an increase for more Canadians. In the research paper previously mentioned, the Bank of Canada estimated that there will be around 50 per cent of variable-rate, fixed-payment mortgages that have now reached their trigger rate. Meaning that additional payments are going to be required, which is around 13 per cent of all Canadian mortgages.

“For a variable-rate mortgage with variable payments, the size of regular payments fluctuates as the prime interest rate changes—if prime rates go up, the mortgage payment increases to cover the larger interest component.” — Bank of Canada 

The Deputy Governor stated that the risk of Canada’s financial stability is elevated due to the higher levels of household debt, added to it is the rising interest rates. However, the Bank of Canada does expect that the finial system as a whole is going to withstand this time of stress. 

“If interest rates increase beyond the trigger rate, the amount required to cover the interest payment will be more than the mortgage payment. Each borrower with a variable-rate mortgage with fixed payments is subject to an individualized trigger rate, which is specified in their mortgage contract.” — Bank of Canada 

The VanDinther Team

There’s a lot of information to take in and learn when it comes to different types of mortgages and what they mean. It can be overwhelming at times, that’s why we want to keep our clients informed. If you have any questions please reach out to us. 

Contacting the VanDinther Team can be done directly by phone at 905-330-2002, or by email at info@loriv.com. There’s never a wrong time to list your home, so let’s chat about what you’ve been looking for and how our team can help you make the right moves! 

Burlington Real Estate Statistics

Burlington Real Estate Statistics for October 2022

Real Estate Market, Real Estate Trends / By /

Burlington Real Estate Statistics

The REALTORS® Association of Hamilton-Burlington (RAHB) reported a total of 756 sales in October 2022. In the Burlington real estate market area there were a total of 168 residential sales. This was a 33.3 per cent decrease when compared to the same time last year. 

New listings in the Burlington real estate market area were reported to have had a total of 307. That’s an 18 per cent increase when we compare it to October 2021. The average price of a residential property in Burlington in October 2022 was $1,098,439, which was a 5.2 per cent decrease. 

“For the first time since March, benchmark prices in the region did not trend down relative to the previous month. However, at an October price of $1,010,600, prices have still eased by 22 per cent from the February high. The benchmark prices remain over 15 per cent higher than they were at the end of 2020.” 

Regional Summary 

The above chart, Regional Summary, and gives us a better look at the Burlington real estate statistics and sales across all the areas. RAHB reported that sales trended down across all areas within the Burlington market area. It was reported that both areas 32 and 35 “saw different levels of listing growth, keeping inventories low relative to sales activity.” 

Millcroft (area 35) had the greatest number of sales for October 2022 with a total of 51 sales. This was a 26.1 per cent decrease compared to the same time last year. The average price of a residential property was $1,016,627, a small decrease of only 1.1 per cent. 

Another area to note is area 31 which had a total of 31 sales in October 2022, a decrease of 40.4 per cent. This area reported a total of 67 new listings which was a 9.8 per cent increase. The average price of a residential property in this area was $1,136,887, this was a 1.3 per cent increase. 

The final area that we’ll review is area 38, this area had the highest average residential property price of $2,076,250. This was a decrease of 34.6 per cent and had a total of 4 sales in October 2022. Let’s now take a look at the below map and get a closer look at the different areas within the Burlington real estate market. 

Average Residential Price by District 

The above map, Average Residential Price by District, illustrates the different areas within the Burlington real estate market area. This map allows us to see the average price of a residential property and whether that price had a decrease or increase in October 2022. 

The area with the greatest number of sales was area 35, better known at Millcroft. This area is also one of the most sought after areas in Burlington. The average residential property price in Millcroft was $1,016,627, which was a small decrease. Listed below are the areas that reported the greatest number of sales in the Burlington real estate market area. 

  • Area 35: 51 sales, 68 new listings, $1,016,627
  • Area 31: 31 sales, 67 new listings, $1,136,887
  • Area 32: 22 sales, 19 new listings, $872,955
  • Area 34: 22 sales, 35 new listings, $962,357

It’s interesting to review this map and look for the area that you live in, this way you can get a better idea of what your home might be worth. We’re able to see whether prices have had a decrease or an increase in their average price. RAHB has also broken down each property type and that’s what we’ll review in the next chart. 

Property Type Comparison  

The above chart, Property Type Comparison, allows us to review the different property types within the Burlington real estate market area. We can see what the average price was, how many days it was on the market and number of sales in October 2022. 

According to RAHB, detached properties had a total of 80 sales, this was a decrease of 35.5 per cent. There were a total of 146 new listings with an average property price of $1,414,375, which was a 5.2 per cent decrease. 

Semi-detached properties were reported to have had a total of seven sales, a decrease of 46.23 per cent. There were 13 new listings reported in October 2022 with an average price of $1,069,429. The average price had a small increase of 9.9 per cent compared to the same time last year. 

RAHB reported that there were 39 sales of townhomes or row houses in October 2022. There were a total of 68 new listings with an average price of $860,705, this was a 6.4 per cent decrease. 

Finally, it was reported by RAHB that there were 41 sales of apartment-style properties, this was a 29.3 per cent decrease. There were a total of 79 new listings with an average price of $734,473, a 1.2 per cent increase when compared to the same time last year. 

REALTORS® Association of Hamilton-Burlington Real Estate Statistics 

The REALTORS® Association of Hamilton-Burlington (RAHB), reported a total of 756 sales in October 2022. Sale were reported to have been below the ten-year average, while new listings reported levels that were higher than last year. 

In the Burlington real estate market area RAHB reported a total of 68 residential sales. This was a slight decrease of 33.3 per cent when compared to the same time last year. The average price of a residential property in Burlington was reported to have been $1,098,439, which was a 5.2 per cent decrease. 

“There is no question that we have seen a shift from the unsustainable activity that occurred throughout the pandemic as some of the supply challenges have eased. While fewer new properties are being listed below $800,000, there are more opportunities for buyers looking to move up in the market. The danger for both buyers and sellers can be trying to time the market. With conditions sometimes turning quickly or silently, it is important to talk to a professional RAHB REALTOR® who is plugged into the local market.” — Lou Piriano, President of RAHB.

For More Information About These Statistics 

If you’re looking for more information or want a more detailed and in-depth matrix of these real estate statistics, please refer to the Burlington Real Estate Statistics for October 2022.

Contact the VanDinther Team

Do you have any questions about the statistics mentioned in this blog? If you do one of the fantastic members of the VanDinther Team will be happy to help. If you’ve been wondering what your home might be worth, give our “What’s My Home Worth” calculator a try. 

Please feel free to contact the VanDinther Team anytime and someone will be more than happy to help you find the home you’ve been dreaming of. After all the VanDinther Team has been working with clients in the Burlington and surrounding areas for decades and are here to Help You Make The Right Moves!

Home Staging

Is Home Staging Worth It?

Home Buying and Selling, Home Improvement / By /

Is Home Staging Worth It?

Is it worth it to have your home staged? This is a great question and I’m happy to answer, however, it’s one that can have a few answers. When you decide to sell your home that’s really the first step in the whole process, then comes the question of whether or not to stag it. Does it need to be? Your REALTOR should be able to help you answer this question.

If you’re home needs some improvements to help potential buyers image themselves living in your home, then I say why not do it! But what is home staging anyway? It’s a way to present your home, as I mentioned above, to prospective buyers in order to sell it. REMAX Canada recommends three steps that include; depersonalizing, decluttering and redecorating. 

Depersonalize Your Home

Let’s start organizing and putting things away, less is more! Pack away your personal items from around your home. These items can be pictures, awards, etc, let’s clear them away and clean up. Most likely you’ll have a professional stagger some and help you determine what to pack away and what to keep!

Decluttering Your Space 

When we’ve lived somewhere for a few decades things can pile up. Again, less is more and we want to make sure buyers can see themselves living there and loving it. We’ll pack away items that we don’t need and make space. Clean, organized and looking fresh. You might even want to paint a room or two, that’s where redecorating comes in. 

Redecorate The Room

The time has come, time to redecorate and make your home shine. Literally we want to make it shine and look like the perfect home for the prospective buyer. There’s nothing like a fresh coat of paint, it can change everything. Your stager might even want to rent some new furniture to help get things even more modern and stylish. According to REMAX Canada, hiring a professional stagger is the right move, and I agree! 

Who’s Paying For This?

Typically the seller is going to pay for this service, but it’s understood that they’ll make the money back in the sale of the home. According to the National Association of REALTORs, homes that are staged sell up to 30 percent more than those that aren’t staged. 

The cost of having your home staged is determined by a few different factors. These can be the overall state of the home and how much staging is actually required. The home might only really need some paint and cleaning, while another home might be more work. 

Depending on the amount of staging needed will determine the cost, that’s something you’ll discuss with your REALTOR and stager. That’s the fun part, we want to make your home so appealing that buyers are knocking down the door to buy it! 

The VanDinther Team 

If you have any questions about home staging and how we can help you, let us know! The VanDinther Team is made up of experience real estate professionals that are ready to help you with all of your home buying and selling needs. 

Have you been wondering what your home might be worth? Give our “What’s My Home Worth” calculator a try and find out! Please feel free to contact me or my team at anytime either by phone at 905-330-2002 or by email at info@loriv.com.