A cool new mortgage product for first time buyers in Mississauga
Mississauga housing affordability is just about the worst ever. It’s hard for first time home buyers in Mississauga to keep up with escalating home prices AND rising interest rates. You see, every time mortgage interest rates increase, this reduces the amount of money the banks will lend you. This is compounded by the mortgage stress test, which adds a further 2% to your mortgage contract rate when calculating your debt service ratios.
This is one more good reason why homebuyers have to keep an eagle eye out for the lowest rates possible. (a) because no one wants to pay more than they have to each month for their shelter needs and (b) because the lower rate will yield the highest purchasing power!
Unless you have been living under a rock in recent weeks, you surely know that interest rates are still rising, and will do so until the Bank of Canada is sure that inflation is under control and that we can be comfortably at a CPI rate of 2% or so.
So along came Marathon Mortgages with a brand new mortgage specifically for first time buyers – it is the lowest rate on offer anywhere and it comes in at 4.5% for six months! This is available for purchases of owner occupied homes costing under one million dollars and insured by CMHC, Sagen or Canada Guaranty.
Pretty much every other mortgage rate out there starts with a 5 or a 6 these days, so the 4.5% rate is the absolute lowest anywhere.
This is a great way to optimize your buying power once the mortgage stress test is applied. Quite simply, you qualify for a larger mortgage, and after six months you convert to a longer term.
My colleague Rob McLister reports this is especially helpful for first-time buyers who:
- can barely scrape together the minimum 5% to 7.5% down payment
- have strong credit and solid employment
- have debt ratios above the 39% GDS/ 44% TDS insurer limits
- can’t pass the stress test because of it
- are forced to rent longer as a result
“We’re giving significant buying power back to the client, over $100,000 in some cases,” says Albert Collu, CEO of Marathon Mortgage Corp. “That lets them get the home they need instead of the only home they can afford.”
Of course, six months passes really quickly and at that time Marathon will offer renewal options where you must take a 3-, 4-, 5- or 10-year fixed from Marathon or pay a 1% fee. Mr. Collu also said “At maturity, customers get a renewal offer based on best available rates”
This mortgage is available through mortgage brokers serving Mississauga and surrounding areas.
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