Costs for buying a home have decreased in Etobicoke
Costs for buying a home have decreased in Etobicoke? Yes you read that right! Even though mortgage rates have increased over the past 6 months, prices of homes have decreased. That means the costs associated with buying a home have also decreased.
<img class=”alignnone size-large wp-image-9861″ src=”https://www.mcizmar.com/wp-content/uploads/2022/09/AUG-Milana-Cizmar-RLP-Market-Stats-1024×1024.jpg” alt=”Costs of buying a home have decreased in Etobicoke” width=”581″ height=”581″>
Do you think you can’t afford a home in Etobicoke now that interest rates have increased? Think again.
Prices of homes in Etobicoke have moderated at the same time interest rates have increased. This creates an offset of your <strong>total purchase costs</strong> and in some cases monthly carrying costs.
For example: A detached home is sold in Etobicoke for $1.5 million in January 2022. In July the same home is sold for 20% less. The buyer puts 20% down for their down payment. In January that amount would be $300,000 and in July the amount would be approximately $232,546. <strong>The downpayment required is $67,344 less! </strong>
<h3>Land Transfer Tax:</h3>
The land transfer tax on this home in January would be $52,950.
That same home in July the land transfer tax payable would be $39,470. <strong>This is a savings of $13,480.</strong>
The buyer purchased a home in Etobicoke for $1.5 million and obtains a mortgage of $1.2 million at an interest rate of 2.79%. The monthly payments are $5,550.
In July the same house in Etobicoke is purchased for $1.16 million and obtains a mortgage for $930k at an interest rate of 5.09%. The monthly payments are now $5,460. <strong>This is an additional $90 savings per month. </strong>
The savings for the down payment is <strong>$67,344</strong> plus a savings for the land transfer tax of <strong>$13,480 = $80,824 this is a substantial amount for the Total Purchase Costs.</strong>
In addition to the total purchase costs you are also saving <strong>an additional $90 per month for your monthly mortgage payments.</strong> This is why it is so important to not just focus on the interest rate when purchasing a home. There are so many costs and variables to consider!
Despite higher interest rates, the <strong>upfront costs to purchase this home are significantly lower.</strong> The total amount and the monthly carry costs are lower than in January 2022.
So rising interest rates really aren’t that bad in the grand scheme of things when you are looking to buy a home in Mimico, New Toronto, Eatonville or any <a href=”https://en.wikipedia.org/wiki/Etobicoke”>Etobicoke</a> neighbourhood. You just need an expert to help you break down the numbers.
If you are serious about making your home buying dream a reality this year please get in touch with me or <a href=”https://calendly.com/milanacizmar”>book a quick meeting with me here</a>. We can talk about your goals and I can let you know about some of the best opportunities for sale. <strong><em>Let’s do this!</em></strong>