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Low rates can't protect Vancouver for long!

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PatrickGunville | 20 Aug 2013, 04:17 AM Agree 0
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The typical homebuyer has no worries about the real estate market. They think as long as they have their interest rate locked in, they will be protected from any future rise in interest rates. The truth is, interest rates are used to control major markets and economies. Vancouver in particular is very sensitive to interest rate manipulation. Just because you locked in a low rate on an expensive home, doesn't mean you are protected if your home drops in value. Sure, you may be paying a lower rate, but you will still be paying perhaps thousands more per month, because you purchased at the top of the market. When interest rates go up, this will actually trigger the Vancouver real estate market crash, and no matter what rate you locked in at, you will be in serious trouble. Either lock in and wait for the crash, or simply wait for the crash, and buy in at a higher rate, because even though your interest rate may be higher, purchasing a significantly cheaper home will actually keep your monthly payments much lower.
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