How Different Rates Impact a $500,000 Home
When buyers hear rates are moving, the first question is usually, “Should I wait?” The reality is that timing the market is nearly impossible. Even the economists at Canada’s biggest banks often disagree on where rates are headed, and many of their forecasts miss the mark entirely.
That’s why it’s more practical to look at what today’s rates mean for your monthly payment, and whether that works for your budget.
The Numbers on a $500,000 Home
Here’s how monthly payments change at different interest rates, based on a 5% down payment with mortgage insurance added:
3.25% Interest Rate
4.25% Interest Rate
5.25% Interest Rate
That’s a difference of over $500 per month between the lowest and highest examples.
Why Timing the Market Doesn’t Work
Trying to hold off until rates drop to the “perfect” level can create problems:
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Home prices may rise while you wait, offsetting any rate savings.
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The right property could pass you by if you delay too long.
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Forecasts aren’t consistent — even the experts can’t agree on the timing or size of future rate changes.
Most seem to believe the 3–4% range is the new normal, but the exact path to get there is uncertain.
Options if You’re Unsure
If you’re concerned about locking in at the wrong time, there are ways to keep flexibility:
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Variable-rate mortgage – Lets you benefit if rates come down and gives you the option to lock into a fixed rate later.
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Shorter-term fixed rate – Keeps payments predictable now, while leaving room to adjust if rates shift in the next couple of years.
Final Word
No one can predict rates with certainty, not even the economists who study them full-time. What matters most is whether the payment works for your situation today, while keeping in mind that the long-term “normal” may settle in the 3–4% range.
Call or text (902) 402-9779, or visit my website to fill out a five-minute pre-approval form.