Toronto Housing Market Cooling? Now’s the Time to Get Mortgage Financing Locked Down
Back in April, after much discussion and prompting from outside sources, the Ontario government instituted several measures to cool a continually hot Toronto housing market. These measures are an attempt to temper rising prices which are becoming more and more prohibitive for the average Canadian and to reduce the impacts of a potential crash.
As noted in a recent CTV News article, “the 16-point Fair Housing Plan to tame the Greater Toronto Area’s expensive real estate market, including measures such as expanded rent control and a foreign buyers’ tax,” has already had an impact.
Furthermore, back in June, the Toronto Real Estate Board reported that “active listings in the GTA surged 42.9 per cent from a year ago and sales plunged 20.3 per cent in May compared to the same time last year. Although the average selling price for all properties for the month of May was $863,910, up from $752,100 last year, it was still down from $919,614 in April, according to the real estate board.”
The data suggests that a cooling has already started and is likely to continue. With the market cooling, now’s the time to think about getting mortgage financing locked down.
Why? As it currently stands, the Toronto housing market supports high home values. However, if it continues to cool and home values fall, homeowners will have less home equity to take advantage of.
This is a particularly sensitive issue for those considering refinancing to consolidate debt – an option which has become very popular with the current housing values. More equity typically means more access to funds in order to consolidate, and often a better interest rate.
Moreover, if Canadian interest rates continue to rise, and thus mortgage payments rise, more equity may not necessarily cover what you need it to.
If you want to borrow money, borrowing while the market is high is your best bet. As mentioned, if the market cools significantly and that equity is no longer available, or the interest rate increases again, you may have fewer options to deal with the debt.
A second mortgage is a great way to borrow against your assets without the penalties associated with breaking your first mortgage. If you’ve been considering a financial move to strike while the iron is still hot, don’t take too long to do so.
At DebtCare, we can help you discover how to make your home work for you.
Get in touch with us today by calling 1 (888) 890-0888.
Source: CTV News, “Cooling measures already affecting hot Toronto housing market: survey,” http://www.ctvnews.ca/business/cooling-measures-already-affecting-hot-toronto-housing-market-survey-1.3473582.