Whether you are shopping for your first home, upgrading or downsizing, finding the right borrowing product can be just as important as finding the perfect space.

As interest rates have risen rapidly, finding the right product to fit people’s financial picture has become more confusing and stressful than ever before. The standard 5-year fixed rate mortgage has become less appealing to many and variable rate mortgages have become more risky due to the correlation between their rate and the ever changing policy rate.

Navigating Victoria BC’s Real Estate Market: Expert Insights on Optimal Mortgage Options

Studies have shown that 1 in 4 new home buyers and renewals have started choosing shorter terms in hopes that rates will soften in coming years. According to the CMHC (Canadian Housing and Mortgage Corporation) in January 2023 36% of new mortgages had terms between 1 and 3 years. 28% were fixed rate terms between 3 and 5 years. Which is a deviation from the standardly sought after 3-5 year terms.

Reports are showing that borrowers and economists alike are expecting rates to soften from their impactful 15 year high. Given that the current offerings show a minimal difference between commitment terms, shorter terms have given consumers the option to ride out the Bank of Canada’s interest rate hikes. 

According to Desiree Palfrey of Paragon Mortgages in Victoria, shorter terms have become the more beneficial option for many consumers. Her main suggestion is to follow what fits best to your financial picture. When shopping for the right mortgage product the best approach is to sit down with a mortgage professional like Desiree Palfrey and discuss in detail what your outlook is for the duration of the term you are considering. She will assess your needs and goals as well as your risk tolerance during the process of the mortgage. 

Every borrower is different and whether it is your Real Estate Agent or Mortgage Professional both have a responsibility to ensure you end up with the home and borrowing option that fits you best.

Both Jeff Bishop and Desiree Palfrey offer expert advice with a tailored personal approach that is crucial for successful real estate transactions.