Courtesy of:
Matthew Daniel Tamburello
Team Leader & Broker
647-697-6743
matthew.thetamburelloteam@gmail.com

The 2022 & 2023 Real Estate Market has certainly been an interesting one to say the least!

With opportunities all around us, I thought to prudently address a question regularly and rightfully asked: Is it a good time to buy with increased interest rates?

Good question so let's dig in for clarity...

What is the difference between a Home valued at $550,000 in a low interest rate market (2%) selling for $750,000 (because low interest rate markets breed competition and paying over asking) and a Home valued at $750,000 in a high interest rate market (5%) selling for $550,000 (because high interest rate markets suppress competition and paying over asking)?

Here’s what that looks like:

Purchase Price

• $750,000

Down Payment

• $25,000 (5% up to $500,000)
• $25,000 (10% on the remaining balance of $250,000)
• = $50,000

Mortgage

• $700,000 (purchase price minus downpayment)
• 25 year term
• 2% interest rate
• = $2,966.98/month

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Purchase Price

• $550,000

Down Payment

• $25,000 (5% up to $500,000)
• $5,000 (10% on the remaining balance of $50,000)
• = $30,000

Mortgage

• $520,000 (purchase price minus downpayment)
• 25 year term
• 5% rate
• = $3,039.87

It’s the same money +/- just applied differently.

That being said, there’s no cost savings for a buyer, however - and this is a big however - the power a buyer has in a market like today is high inventory and negotiating strength.

I often say “while others are waiting for the crash - others are making the cash”. Decide accordingly :)

Everyone's situation is vastly different and unique so to learn how this information impacts you, call 647-697-6743 today. Happy to help!