Buy A Home Now Or Wait? A Mortgage Expert Weighs In

Buy A Home Now Or Wait? A Mortgage Expert Weighs In


We attended a very interesting webinar on September 20, 2023, by Joanna Lang who is a mortgage agent and managing partner of Outline Financial based in Toronto.  Much of her presentation is based on information concerning Toronto (and from the Toronto Real Estate Board).  Despite this focus, similar conclusions apply to mortgages in Ottawa.


While the “Average Price” in her chart above speaks of the more expensive Toronto market, the overall information is applicable to Ottawa.  (Dividing by 2 will give you a rough idea, though the average price in Ottawa is somewhat higher than that.)

Note that despite the purchase price and down payment being substantially lower, the monthly mortgage payment is actually higher now than 18 months ago.  And the higher interest rates mean that you need a higher income to qualify, even though the price of the home is quite a bit less.


And look at her forecast for 2025.  (Click on the image to expand it.)  She anticipates only a moderate increase in prices and a drop in mortgage prices.  However, the increase in price swallows the benefit of lower prices – mortgage payments would be almost the same.  However, your income would need to be about 15% higher to qualify for the mortgage, even with the lower rate!


Deciding between a fixed rate and a variable rate mortgage used to be relatively straightforward.  Variable rate mortgages tended to be best in the past and fixed provided peace of mind.  But this was crushed last year as we came out of covid and the Bank of Canada decided to increase their “bank rate” (lending rate to the banks) from 0.5% in January 2022 to 5% now.  This caused many variable-rate mortgages to hit their Trigger Rate, which is when the mortgage payments don’t even cover the interest on the mortgage.  Which “triggers” the monthly payments to increase significantly.  Most experts believe that the Bank of Canada will halt their increases for the time being.


One more chart:  population growth from 2010 to mid-year 2023.  The red bars are for Canada overall; the black bars for Ontario.  From a relatively stable population to the beginnings of many more people to a major spike this year (and a dip during covid when immigration was restricted).

The Housing Affordability Task Force  Report
• “Ontario must build 1.5 million homes over the next 10 years”. More than double the current pace of supply.

Smart Prosperity Institute 
• Ontario will “require one million new homes” over the next 10 years.

Canada’s Housing Supply Shortage: Restoring affordability by 2030 
• “An additional 3.5M affordable housing units are needed by 2030″

Ontario Rental Market Study Update (FRPO/Urbanation): Revisiting the Rental
Demand & Supply Outlook in 2022 and Beyond

Canada’s population growth exceeds all G7 countries

Canada’s number of homes per capita trails all G7 countries

If you’d like more information, including the background info supporting Joanna’s conclusions, please click on the image below to access her full presentation.  And of course we’re always happy to answer any questions you have.


Check out more articles in the with similar categories – Article, Free Ottawa Property Value Estimate, Ottawa Real Estate Market