According to the Star Phoenix today RBC will be ending the ongoing mortgage rate war on Thursday, March 29th. They are currently offering a 2.99% special on a 4 year fixed closed mortgage but this will jump to 3.49% effective March 29th. RBC will also be raising its five-year closed rate to 5.44% and its five-year variable mortgage to prime plus 0.20% which is a 0.10% increase.

BMO, Bank of Montreal, was the first Canadian bank to bring in the 2.99% five-year term in January this year and other banks soon followed this with the same rate over four years. Banks are battling for market shares so these wars are not unusual however RBC has signalled a strategic retreat in this ongoing war. The Bank of Canada warns that households are overleveraged with home purchases.

While it is a great time to buy a house for sale in Saskatoon, consumers should be aware to not overspend as interest rates will inevitably go up. Using an experienced and trusted Saskatoon real estate agent is imperative. Even if the bank is willing to lend you $500,000 you may feel more comfortable spending $400,000 to give you some wiggle room when the rates go up as this means your payments also go up.

The danger with too many people overspending is that, when rates go up and they find they can no longer afford their home in Saskatoon or other areas, there will be a flood of houses for sale in Saskatoon and other markets. Luckily, the Saskatoon real estate market shows no signs of slowing down. Quite the contrary. Overall though it is a risk to Canada’s economy, not just the real estate market in Canada.

It is just advisable for any prudent Saskatoon home buyer to live within their means and leave some room for increasing rates or a change in your finanical status. It should be common sense but many Saskatoon home buyers and consumers in general have champagne taste on a beer budget and end up overspending or spending more than they should. As a Saskatoon real estate agent I always ask my clients what they are pre-approved for and then what they are comfortable spending as these are two totally different things. I do sometimes have Saskatoon real estate clients who want to spend more than they are approved for as well but this is why the lenders and CMHC have tightened their reins, to protect the buyers and the lenders.

If you are thinking about purchasing a house for sale in Saskatoon give me a call and I can recommend some great Saskatoon mortgage brokers. Once you have your pre-approval sorted out I would be happy to have a client meeting to discuss your needs and wants and then start shopping for a house for you and your family. It is important to have an experienced and trusted Saskatoon REALTOR to protect the largest purchase of your life so get in touch with me to take care of the process for you.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Fusion
kari@saskatoonrealestate.net

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