Despite the residential mortgage rate increase from two of Canada’s largest banks, it’s still a seller’s market, according to a Vancouver real estate agent.
The biggest increase, affecting five-year mortgages, has raised rates six-tenths of a per cent to 5.85 per cent, up from 5.25 per cent.
“Even with the increase, interest rates are still remarkably low,” said Ryan DeLuca of Sotheby’s International Realty Canada.
“This is not a huge jump, so it won’t affect the housing market too much,” said DeLuca.
“Homeowners who have fixed-rate mortgages won’t be affected by the increase, which may influence potential buyers’ decision to lock in to variable-rate mortgages.”
The interest rate hike at RBC Royal Bank and TD Canada Trust is the banks’ reaction to the rise in inflation, experts say.
DeLuca said potential buyers should not be scared by the rate hike.
“Even though it’s a seller’s market, you’re still going to get a good deal,” said DeLuca.
The Bank of Canada’s key overnight rate of 0.25 per cent is expected to remain constant until this summer, a key time for the real estate market, said CIBC chief economist Avery Shenfeld.
He added that consumers should be on the lookout for a gradual rise in the fall.
