With the interest rate much much lower in the Canadian History, the newspapers are flooed with advise of buying home.
Even people in the streets are talking about it.
Is is OK to buy a home at this time?
Last couple of days article in the Toronto Star was eye opener.
It has clearly mentioned the raise in the prise of houses and apartments. I don't remember the figures but it was on an average between 5 to 10 percent.
Now just consider - you are buying a home of $200,000, and five percent of that would be 10,000 and ten percent would be 20,000. Let us consider you are paying $15,000 extra just because right now the demand is more.
Now how much interest rate is down? Hardly by 2 percent?
If you morgate amount of 200,000, what would your pay at the rate of 2 percent less? 4000 a year. It means for the first four year you are going to pay $16,000 less, but remember you already paid $15,000 upfront!
Is it a loss or gain?
I think it is stupid to buy a home at this time.
I welcome your inputs on this.
Thanks.
-----------------------------------------------------------------
Torontian Desi
I guess it all depends on what are your priorities, but you are right, at this time the price is higher.
-----------------------------------------------------------------
A Proud Indian Canadian
canadian real estate market is not good for invesment.You know never know when it will go up or down !! Also it is not avisable to purchase for temptation tof low intrest rate with
higher loss in higher rate !!!
ye bhi canada he bhai !!!
Location: Toronto, Canada
Posted on: 16-01-02 15:53:23
Kyu bhai shahab?
House lene ki kya jarurat hai ha? Jab yaho par real estate ka kimat ka kuchh thikana nahi hai tab ye sab kaise sochane ka.
I agree with Guju totally. This is Canada. Don't be cheated by government.
Dear friend
As per my view the calculation shown in your artilce is not eonugh for making a decision for weather to buy a house or not.
Now just consider - you are buying a home of $200,000, and five percent of that would be 10,000 and ten percent would be 20,000. Let us consider you are paying $15,000 extra just because right now the demand is more.
Now how much interest rate is down? Hardly by 2 percent?
If you morgate amount of 200,000, what would your pay at the rate of 2 percent less? 4000 a year. It means for the first four year you are going to pay $16,000 less, but remember you already paid $15,000 upfront!
Is it a loss or gain?
I don't understand why do you condiser only 4 years.
What will happen for 20 years. 20x4000=80000 ?
If so than it looks that this is the time to buy a house.
Actually I don't know in detail calculations of interest but this just for you hint.I hope you will think again and give us some more feedback.
Quote:
Orginally posted by pravin
Dear friend
As per my view the calculation shown in your artilce is not eonugh for making a decision for weather to buy a house or not.
Now just consider - you are buying a home of $200,000, and five percent of that would be 10,000 and ten percent would be 20,000. Let us consider you are paying $15,000 extra just because right now the demand is more.
Now how much interest rate is down? Hardly by 2 percent?
If you morgate amount of 200,000, what would your pay at the rate of 2 percent less? 4000 a year. It means for the first four year you are going to pay $16,000 less, but remember you already paid $15,000 upfront!
Is it a loss or gain?
I don't understand why do you condiser only 4 years.
What will happen for 20 years. 20x4000=80000 ?
If so than it looks that this is the time to buy a house.
Actually I don't know in detail calculations of interest but this just for you hint.I hope you will think again and give us some more feedback.
Pravin,
The interest are fixed here for maximum period of five years only. After that you have to renew the lease and have to pay the interest at per that time. So it will be based on the market condition.
So, you calculation that you will save 80000 is baseless. Maximum you can save over a period of five years is 20000, which you are already paying upfront by higher prices.
So there is really no advantage for this lower interest rate hypes.
What do you say?
-----------------------------------------------------------------
Torontian Desi
Hello,
I strongly believe, if one can afford to purchase a house then one should buy one at the earliest opportunity possible. Putting it simply, one has to live somewhere, and if you don't buy, then you will rent and end up paying every month anyway. If you buy, then after 20/25 years you would have paid your mortgage and thereafter be living in your own house rent free. Also, your home is likely to have appreciated in price over the years. Now compare that with someone who is renting, they would be paying rent all their life and what would they end up with? Not much that they can call their own.
Also, consider the possibility of your lifestyle. One would certainly get more freedom of living under their own roof and most probably get more living space for the same amount of rent / month.
This is just a simplistic way of looking at this, but hopefully it made some sense to all those unsure about renting or buying.
