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What Your Rent Can Buy (May 2015)

 

A perennial question:  to rent or to buy?

If you’ve thought about it, you likely have reached the conclusion that there are pros and cons to both options.

My advice [from Steve], is that if you’re younger, it’s a great time to take advantage of the low interest rates and buy a home. You might take a hit on the CMHC premiums (HINT: get qualified before the rate increase June 1!)

For current owners, if you’re thinking about moving, now is a good time.  The interest rates are very attractive, and it’s a close-to-even seller-to-buyer market (because more buyers are looking to take advantage of the rates).  Also, because the buyer/seller ratio is fairly even, it’s a pretty good time to buy…

And, as we get older, the other perennial question:  to keep the home or sell and rent?

Ottawa home prices have risen the last couple of years, but not nearly as quickly as previously.  Though never dramatic, April 2015 was up only 0.9% over April 2014.  Condo’s finally increased – by 2.7%, April over April.

For the older, and hopefully retired crowd, there is – of course – no simple answer. There are potentially three different options:

  1. Continuing to live in your paid-off home is very attractive.  Familiarity and comfort are particular reasons.  But there is the upkeep and attention required…  Plus property tax and utilities.
  2. Condos:  are an attractive option for many.  However, the condo fees  must be taken into account, as they are generally a significant expense in most complexes.
  3. A retirement home:  The most easy living lifestyle, as they will provide housing and food (various meal plans are usually available).  Most often there are in-house nurses, and a physician will vist on a regular basis. Excursions, shopping, and entertainment are also usually included.

There are good and less-good features with all of these. Your choice will depend on your circumstances of course. Please let us know you have any questions that we can assist with.

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Comparing Rent To A Mortgage (Compliments of George Hartsgrove)

          Rent      Mortgage  Mortgage Amt              Down         Purchase            Income
Payment       Payment      (inc. CMHC)         Payment                 Price        Reguired*
$450.00      $450.00     $98,364.25     $5,014.11   $100,282.14   $20,316.11
$500.00      $500.00   $109,293.61     $5,571.23   $111,424.60   $22,573.46
$550.00      $550.00   $120,222.97     $6,128.35   $122,567.06   $24,830.80
$600.00      $600.00   $131,152.33     $6,685.48   $133,709.53   $27,088.15
$650.00      $650.00   $142,081.69     $7,242.60   $144,851.99   $29,345.50
$700.00      $700.00   $153,011.05     $7,799.72   $155,994.45   $31,602.84
$750.00      $750.00   $163,940.41     $8,356.85   $167,136.91   $33,860.19
$800.00      $850.00   $185,799.13     $9,471.09   $189,421.83   $38,374.88
$900.00      $900.00   $196,728.50   $10,028.21   $200,564.29   $40,632.22
$950.00      $950.00   $207,657.86   $10,585.34   $211,706.75   $42,889.57
$1,000.00   $1,000.00   $218,587.22   $11,142.46   $222,849.21   $45,146.92
$1,050.00   $1,050.00   $229,516.58   $11,699.58   $233,991.67   $51,749.65
$1,100.00   $1,100.00   $240,445.94   $12,256.71   $245,134.13   $54,213.92
$1,150.00   $1,150.00   $251,375.30   $12,813.83   $256,276.59   $56,678.19
$1,200.00   $1,200.00   $262,304.66   $13,370.95   $267,419.05   $59,142.46
$1,250.00   $1,250.00   $273,234.02   $13,928.08   $278,561.51   $61,606.73
$1,300.00   $1,300.00   $284,163.38   $14,485.20   $289,703.97   $64,071.00
$1,350.00   $1,350.00   $295,092.74   $15,042.32   $300,846.43   $66,535.27
$1,400.00   $1,400.00   $306,022.10   $15,599.44   $311,988.89   $68,999.54

BASED ON AN INTEREST RATE OF: 2.690%
(INTEREST RATE SUBJECT TO CHANGE WITHOUT NOTICE)
ANNUAL TAXES ARE ASSUMED TO BE 1.25% OF PURCHASE PRICE
Assumptions made in calculating the above amounts include estimated property taxes and no more than 8% of the applicant’s gross income towards personal debt payments (ie: credit cards, car payment, personal loans, etc.). The above amounts are estimates and qualification still depends on a formal mortgage application, credit verification and other conditions as may be necessary for approval. The above rates are subject to change without notice.
For Prequalification Call:

George Hartsgrove
Mortgage Agent
613-263-0609
ghartsgrove@mortgagealliance.com
Corporate Office: 200, 2005 Sheppard Ave E, Toronto ON, M2J 5B4 Phone: 1-877-366-3487

 

 

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