Today I received an email from Kimberley Zakaib who happens to be our in house TD Canada Trust mortgage broker. It was a reminder on just how different this market is from 1990 and just how amazing the opportunities are. With Kimberley's permission I have included her findings.

"If you are in the market to purchase your first home or considering moving up, 2009 may be a great year for you! In the past there has always been an inverse correlation between interest rates and the price of homes. If we were to look at 1990 as an example, house prices dropped, but as fast as the price dropped the interest rate increased even faster. The rates in 1990 topped out at around 14%. As a result, the cost of carrying a home in many cases went up not down.

Here is an example of 1990 versus 1989:

Mortgage in 1989 250,000 @ a rate of 10% = Payments of $2,235.00

Mortgage in 1990 225,000 @ a rate of 14% = Payments of $2,640.00

As a result a savings of $25,000 in price was OFFSET by an increase in payment of approx $405. So $405 x 60 months (5 yr term) = $24,300.00

In today's market we look at 2009 versus 2008:

Mortgage in 2008 250,000 @ a rate of 5.75% =Payments of $1,562.00

Mortgage in 2009 235,000 @ a rate of 4.89% =Payment of $1,352.00

Now $15,000.00 in savings PLUS $210 x 60 months (5 yr term) = $12,600.00 in lower payments, results in total savings of $27,600.00!

This is a big difference!!!!!

You can carry a mortgage of $460,000 for the same payments as the $225,000 mortgage cost in 1990. There has never been a better time to buy!"
For more information please contact Eva Novotny, Remaz Ultimate Realty Inc. Brokerage, 416-487-5131