Head to head: Is rate more important than price for first-time buyers?

Head to head: Is rate more important than price for first-time buyers?

Head to head: Is rate more important than price for first-time buyers?

Clinton Wilkins-Senior mortgage advisor-Centum Home Lenders

“First-time buyers face unique challenges, depending on where they live in Canada. In cities such as Halifax and Toronto, with rental vacancy around 1%, young Canadians are facing higher rental costs, making homeownership more attractive.

Many first-time buyers are early on in their careers, have some savings and will qualify for decent rates. Rates are important, but affordability is probably the number-one issue for first-time homebuyers, especially in high-growth markets. In these areas, where average market prices are higher, would-be homeowners can struggle to find homes they will qualify for without having a larger down payment or co-signer.”

Rob Jennings-Owner and mortgage advisor-East Coast Mortgage Brokers

“We all deal with rate questions every day – it’s no doubt an important part of the homeownership puzzle, but only one piece. First-time homebuyers ask about rates because it’s really the only thing they know about a mortgage, but what they’re really asking for is more info.

My rate conversations quickly turn from rates to affordability, penalty calculations, pre-payment privileges, portability, etc. We can all calculate the difference in 0.1% or what plus/minus $10,000 is on the home price, but when a client is well-informed in all aspects of their first mortgage, it makes this huge life event much more comfortable.”

Vittorio Oliverio-Mortgage broker-Centum Professional Mortgage Group

“The increase in house prices means that rate is the main determinant of what a buyer can afford. When I purchased my first home, the interest rate was 8.5%. The house was $94,000; however, the payment was the same as if I purchased a $280,000 property today. A higher rate would put more people out of the housing market.

The interest rate is the most important part for the housing market. It controls who buys and how much. We as a society and, more important, the government have to realize that prices of houses are not going to go down any time soon.”