With the economy in flux, it’s essential to keep an eye on interest rates, as they play a significant role in how much you’ll end up paying for your new home. Let’s break down what interest rates are, how they impact your mortgage, and what you should consider when purchasing a home in various cities across Ontario.

What Are Interest Rates in Ontario?

Simply put, an interest rate is the cost of borrowing money. When you get a mortgage, you’re borrowing money from a lender, and they charge you a percentage for that service—this is your interest rate. 

A lower interest rate means you’ll pay less in interest over time, while a higher rate will cost you more. Even a small change in interest rates can make a huge difference. For example, if you’re looking to buy a $600,000 home and the rate increases by 1%, your monthly payments could jump by a few hundred dollars. That’s why keeping an eye on interest rates is so important when you’re planning a home purchase.

What Are the Current Interest Rates in Ontario?

As of October 2024, the Bank of Canada’s interest rate sits around 5%. This is a bit lower than what we saw earlier this year when rates were higher due to inflation, but it’s still significantly above the ultra-low rates we saw during the pandemic (around 2-3%). While these current rates might feel high compared to those pandemic lows, they’re actually in line with historical norms. 

For perspective, over the past few decades, mortgage rates have fluctuated between 4% and 7% depending on the economy. However, a 5-6% rate can still feel like a big financial hurdle for those looking to buy in pricey cities like Toronto or Ottawa.

How Do Interest Rates Impact Your Mortgage?

Interest rates directly affect how much house you can afford. The higher the interest rate, the more you’ll pay each month, which reduces how much you can borrow. Here’s how this plays out in some of Ontario’s major cities:

Toronto

Toronto’s housing market is one of the most expensive in Canada. Even a small increase in interest rates can add hundreds of dollars to your monthly payments. With an average home price around $1 million, a 1% increase in the interest rate can raise your mortgage payments by $500 to $700 each month. That’s a big deal for homebuyers who are already stretching their budgets.

Ottawa

Ottawa’s housing market is more affordable than Toronto’s, but higher interest rates still have a noticeable effect. For example, if you’re looking to buy a home in the $700,000 range, a 1% increase could add about $400 to your monthly mortgage payment. That extra cost can make a big difference when you’re balancing other expenses like property taxes, utilities, and maintenance.

Hamilton

Hamilton, which has seen significant growth in housing prices over the past few years, is another city where higher interest rates can impact affordability. If interest rates go up by just 1%, a home priced at $600,000 could result in a $300- $400 monthly increase. For buyers in fast-growing areas like Hamilton, this can limit their home options.

Fixed vs. Variable Rates: What’s the Difference?

When you’re ready to buy, you’ll also need to decide between a fixed-rate  and a variable-rate mortgage.

Fixed-rate mortgages: Lock in an interest rate for the entire term of your loan. This offers stability since your monthly payments will stay the same regardless of how the market changes. It’s a good option if you expect rates to rise or prefer predictable payments.

Variable-rate mortgages: On the other hand, change with the market. Your interest rate—and therefore your monthly payments—can fluctuate. If rates go down, you could save money, but if they rise, you’ll pay more. Many homebuyers who chose variable rates in 2022 have seen their payments increase significantly as rates climbed.

What’s the Mortgage Stress Test?

If you’re applying for a mortgage, you’ll also need to pass the **mortgage stress test**. This test ensures that you can afford your mortgage if rates rise by 2%. Even if you’re looking at lower interest rates today, the stress test is there to protect you from future financial difficulties.

The stress test is especially important in markets like Toronto and Ottawa, where homes are more expensive, and there’s less wiggle room in many buyers’ budgets. However, if you’re renewing your mortgage and sticking with your current lender, you may not need to go through the stress test again

Help for First-Time Home Buyers

If you’re a first-time buyer, Ontario offers a few programs to make homeownership more accessible:

• First-Time Home Buyer Incentive: The federal government offers an interest-free loan of up to 10% of the home’s purchase price. This reduces your mortgage amount, making your monthly payments more manageable.
• Land Transfer Tax Rebate: Ontario offers rebates on land transfer taxes for first-time buyers. This can save you thousands of dollars.
• Home Buyers’ Plan (HBP): You can borrow from your RRSP to put toward your down payment. It’s a great way to boost your down payment without taking on more debt

What Should You Do as a Buyer?

If you’re thinking about buying a home, staying informed about interest rates is key. Here’s what you can do:

• Talk to a mortgage broker: They can help you find the best rates and explain how the market is changing.
• Get pre-approved: This will give you a better idea of what you can afford and lock in a rate for up to 120 days.
• Stick to your budget: It’s tempting to stretch your finances, but buying a home you can afford—even if rates go up—will give you peace of mind in the long run.

While interest rates are an important factor in your home-buying journey, they’re just one piece of the puzzle. Focus on finding the right home that fits your budget and lifestyle, and you’ll be in a good position no matter where rates go.

The post Understanding Interest Rates in Ontario: How They Affect Your New Home Purchase appeared first on Sky Stucco Systems Contractor.

Born in a Lab: How ACM Panels Are Cooked Up

• So, here’s the lowdown: ACM panels are like a sandwich. Two aluminum sheets cozy up with a polyethylene core. But these aren’t your average sheets – they get a fancy finish, usually PVDF or Polyester, for a sleek look and weather resistance.
• The sheets and the core have a hot date under high pressure, and voilà – you get a lightweight but sturdy ACM panel. It’s like the superhero of building materials.

Hot or Cold, ACM’s Got You: Continuous Insulation 101

• Now, here’s the cool part – continuous insulation. That polyethylene core isn’t just there to chill; it’s an insulation ninja. Keeps your space cozy without going overboard on the AC or heater bills.
• Translation: ACM panels don’t just make your building look good; they’re like a snug blanket for it too.

Artists at Work: Installing ACM Panels

• Imagine a canvas for architects and designers. ACM panels are that canvas. They’re flexible, like that friend who’s up for anything. So, architects go wild with designs – patterns, colours, you name it.
• Installing them is a breeze. Attach them to a substructure using a cassette system. Sounds technical, but it’s basically making sure those panels stay put and can be swapped out easily if needed.

Let’s Talk Money: What’s the Damage?

• Alright, let’s get real about the moolah. ACM panels might seem like they’re rolling in cash, but think of it as an investment. Prices can range from $15 to $20 per square foot.
• Yeah, it’s a tad pricier upfront, but here’s the kicker – these panels are like the Benjamin Button of buildings. They age like fine wine and cost you less in the long run.

Toronto’s skyline is evolving, and ACM panels are stealing the spotlight. They’re not just making buildings look cool; they’re making them smarter, cozier, and more sustainable. So, next time you stroll by a swanky structure, give a nod to those ACM panels – the unsung heroes of modern construction!

We’ve all been awestruck by those fancy ACM panels that give buildings a futuristic vibe, right? But what if we spill the beans on a little secret? You can get a similar slick look with Exterior Insulation and Finish Systems (EIFS), especially when you dive into the treasure trove of finishes at Durock Alfacing. Hold on, we’re about to take your building game up a notch, and Sky Stucco Systems is here to make it happen!

1. Durock Alfacing: Where the Magic Begins

• First things first – Durock Alfacing is like the Willy Wonka factory for exterior finishes. They’ve got a buffet of textures, colours, and finishes that can make your head spin (in a good way). From smooth and sleek to textured and bold, they’ve got it all.
• Now, imagine all these options as the palette for your building’s exterior. You’re not just building; you’re creating a masterpiece.

2. EIFS – The Chameleon of Exteriors

• EIFS, aka Exterior Insulation and Finish Systems, is the wizard behind the curtain. It’s like makeup for buildings, but way more practical. You layer it on, and it transforms the facade.
• With EIFS, you can mimic the look of ACM panels effortlessly. The secret? Variated finish coats. These coats can replicate the sleek finish of ACM, making your building turn heads without breaking the bank.

3. Sky Stucco Systems: Bringing Dreams to Life

• Enter Sky Stucco Systems, the dream team of EIFS installation. We’re not just saying we’re good; we’re certified. It’s like having a guarantee that your building is in good hands.
• Our crew knows the EIFS game inside out. We’ll take those Durock Alfacing finishes and turn your vision into a reality. Smooth, textured, or somewhere in between – we’ve got you covered.

4. Affordable Glamour: EIFS vs. ACM Panels

• Here’s the kicker – EIFS doesn’t just look good; it’s budget-friendly. While ACM panels can have your wallet on a diet, EIFS is like the budget-friendly cousin who still knows how to turn heads.
• You get the aesthetics without the hefty price tag. It’s a win-win for your building and your bank account.

Toronto, it’s time to shake things up. ACM panels might be the cool kids on the block, but EIFS is the unsung hero ready to steal the show. With Durock Alfacing’s variety and Sky Stucco Systems’ expertise, your building is about to become the talk of the town. Get ready to make heads turn, Toronto!

The post Toronto’s Architectural Marvels: ACM Panels Unveiled! appeared first on Sky Stucco Systems Contractor.

How To Check the Value of Your Property?

The home selling process can be complicated and time-consuming, but understanding what influences the value of your property can make it easier. Location, market conditions, and your home’s condition and features can significantly impact its value.  

Armed with this knowledge, let’s dive into the different methods you can use to estimate the value of your Ontario home. That will ensure the best possible outcome in your real estate endeavors.

#1 Leverage the Power of the Internet by Using Online Valuation Tools

One of the most accessible ways to check the value of your property is through online valuation tools. Websites like Zillow, Redfin, and Realtor.ca offer free estimates based on data from recent sales in your area. These tools use sophisticated algorithms to analyze factors such as location, square footage, and the number of bedrooms and bathrooms.

Keep in mind that these estimates are not foolproof.  Because they rely solely on algorithms, they may not account for unique features or recent renovations. However, they can provide a helpful starting point for understanding your home’s worth and can be used to supplement other valuation methods. By providing you with a base, you’ll also know if you should invest home upgrade that can double the value of your home.

#2 Comparative Market Analysis (CMA) is a Must

Real estate agents compose a report that compares your home to similar ones. That is called a CMA, and it can help determine the market value of your home by examining recently sold homes, active listings, and expired listings.

This method is beneficial if you’re planning to sell your home, as it can give you a better understanding of the current market and how your home stacks up against the competition. A well-prepared CMA will analyze the similarities and differences between your property and others in the area and highlight any unique features that may increase its value. This way, you’ll understand your home’s worth comprehensively.

#3 Hire a Professional Appraiser

For a more accurate and detailed valuation, consider hiring a professional appraiser. An appraiser will conduct an in-depth inspection of your home, considering its location, condition, and unique features. They will also analyze market trends and comparable properties to provide you with a comprehensive report on your home’s value.

This method is handy for refinancing, obtaining a mortgage, or settling legal property value disputes. While this option is more expensive than the previous methods, it offers the most reliable results and can give you greater confidence in your home’s value.

#4 Try the Cost Approach and Start Crunching the Numbers

The cost approach is a valuation method that calculates the cost of rebuilding your home from scratch. This method considers the value of your land, the cost of construction materials, and local labor costs. It’s essential to factor in depreciation, as your home’s value will decrease due to wear and tear.

The cost approach can be a helpful method for estimating the value of unique properties, newly built homes, or homes with significant improvements. Additionally, this approach can help you determine if your property’s value is primarily in the land or the structure itself. This can be particularly helpful when deciding whether to invest in renovations or a new build.

#5 Seek Advice from Local Professionals

If you’re considering a move, such as relocating to Brockville, ON, you’ll want to understand your current property’s value clearly. It is wise to consult with local professionals familiar with the area and its real estate market. For instance, when moving to Brockville, you can rely on Brockville moving pros to help with the transition while also seeking advice from local real estate agents who can provide valuable insights on your property’s value. Local professionals can offer a more nuanced understanding of your property’s worth, considering local market trends and community-specific factors that may impact its value.

#6 Learn from the Neighbors by Attending Open Houses and Home Tours

One often overlooked way to gauge the value of your property is by attending open houses and home tours in your neighborhood. By visiting nearby homes for sale, you can get a firsthand look at the competition and learn about the popular features among buyers in your area. This method lets you compare your home directly to others on the market, giving you valuable information about how your property stacks up and what improvements might increase its value. 

#7 Consider Tax Assessment Records

Another way to get a ballpark figure of your property’s value is by looking at your local tax assessment records. These records, available through your local government office, show the assessed value of your property for tax purposes. While this number may not accurately reflect your home’s current market value, it can give you a general idea of its worth and help you determine if other valuation methods are on the right track.

The Bottom Line

Discovering the most accurate and reliable ways to check the value of your property is essential for making informed decisions when selling or refinancing and crucial in determining whether to renovate or sell your home. By utilizing a combination of valuation methods and seeking expert advice, you can better understand your property’s worth in the local real estate market. With this knowledge, you will be equipped to make strategic decisions on whether to renovate your home economically and increase its value or to capitalize on current market conditions and sell. A well-rounded understanding of your property’s value ultimately empowers you to make the most of your investment and achieve your real estate goals.

The post Ways to Check the Value of Your Property appeared first on Sky Stucco Systems Contractor.

Work with a licensed realtor

Before getting into more detail about buying property in Ontario for non-residents, we would like to give you a valuable tip. We strongly advise using a licensed realtor from the area you plan to buy while searching for properties. A realtor will provide you with reliable, up-to-date information on homes and neighbourhood amenities and current market assessments of the value of the houses. In Ontario, certified realtors are also held accountable for the accuracy of the information they give and for any mistakes or omissions that may occur during the buying process. If something goes wrong, this offers you an additional level of safety.

You will go through client identification

Before acting on their behalf or accepting any money for the acquisition of a property, Canadian attorneys must confirm the identity of their clients. Therefore, you must present identification documents like a driver’s license or passport. In addition, note that client identification is often performed in person. Therefore, choosing and meeting with the lawyer who will finalize the property acquisition on your behalf is a good idea. At the same time, if you travel to Canada to look for a home or create a bank account, it is the perfect time to complete the identification procedure. After you reach an agreement, your lawyer can then represent you.

Applying for a mortgage

You might need to obtain a local mortgage when buying property in Ontario as a non-resident. That is entirely feasible. However, banks frequently demand sizable down payments from non-resident buyers. A typical requirement is 35% of the property’s worth. Furthermore, you might need to reveal the source of the funds, which cannot be a gift from another person.

If you’re a US citizen or resident purchasing your first house in Canada to live in rather than as an investment to rent out, your bank might accept issuing a mortgage with a smaller down payment. In this situation, a 20% down payment could be acceptable. However, note that you will need a Canadian bank account if you apply for a house loan in Canada. You will have to travel to Canada as part of the purchasing process since most banks require you to open a bank account in person. At the same time, you might be able to create a Canadian bank account with your current bank and avoid travelling if you work with a major international bank that is also present in Canada.

Paying the Non-Resident Speculation Tax

Non-Resident Speculation Tax (NRST), a 25% tax that adds to the purchase price, is a requirement in Ontario for non-residents. However, you won’t have to pay the tax for non-residents if you buy with a spouse who is a permanent resident. In British Columbia, for instance, foreign nationals who purchase property must also pay an extra 20% property transfer tax. This tax does not apply to land, structures with seven units or more, apartment complexes, or commercial properties.

On the other hand, even if you have already paid the Non-Resident Speculation Tax, there are several circumstances in which you may be eligible for a refund. For instance, if the property you buy in Ontario becomes your primary residence and you move in within 60 days from the closing. Or if you become a permanent resident in the next four years after the purchase. However, remember that owning a property in Canada is not a factor that will influence your immigration status. It will be considered part of your net worth, but living in Canada does not affect the selection process.

Other taxes and fees to take into account when buying property in Ontario for non-residents

Besides everything we mentioned until now, there are other taxes and fees you must consider when buying property in Ontario. For instance, agent fees. The seller often pays agent fees, so you might not have to pay them when you buy. However, you’ll need to set aside 3% to 5% of the value if you decide to sell. You can add legal and notary costs, annual property tax, land transfer tax, and capital gains taxes (if you want to use the property as an investment and sell it). Also, you might need to pay for the home inspection, title insurance, and property survey.

At the same time, don’t forget about the moving costs. Hiring movers is necessary if you make a long-distance or cross-country move to Ontario. Fortunately, you can easily find a professional team that can help out with your relocation if you do some local research.

When closing the sale

You won’t be required to be present in Ontario for the closing if you have a Canadian attorney. However, it might be necessary to have a local notary public help you with the completion, depending on your home country. Fortunately, you can sign the closing documentation through email and scan the documents. In Ontario, electronic signatures are accepted.

Final words

For many non-resident foreigners seeking a second home, an investment, or a permanent residence, purchasing real estate in Canada is a dream. However, it could cost more to find your perfect property as a non-resident than it would as a citizen or permanent resident. But fortunately enough, there aren’t many legal limits on buying property in Ontario for non-residents. And as soon as you find your perfect Ontario home, you can start thinking of how to improve it and make it feel more like home.

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