There are lots of scary decisions in an adult’s life – changing careers, going back to school, getting married, having kids etc. But right near the top of the list is the decision to build a new, custom home.
I can remember when we built our first house and the stress that went along with coming to the decision. There were so many factors involved not the least of which was finances. When it was all said and done however I can honestly say it was the absolute right thing to do.
If you are thinking about a new home then I am here to tell you that not only is it a decision you will not regret but that now, right now, is the best time to pull the trigger and make it happen. Why? Well there are a number of factors but the biggest is interest rates. Interest rates are about as low as they are going to get right now.
As of the time I am writing this a 5 year variable closed mortgage at Access Credit Union is 1.90 percent. When you consider that in 1982 a 5 year mortgage was more than 18 percent it puts things into perspective. In fact just last year the five year rate was more than 5.2 percent.
Let me put it to you this way – interest on a mortgage today at 1.9 percent on a $450,000 mortgage equals $115,654 over 25 years verses $350,607 over the same period for a mortgage from 2019 at 5.2 percent. That is an incredible difference of almost $235,000. Imagine what you could use that money for.
Another factor in your decision should be increased costs over time. Generally speaking inflation in Canada over the past 10 years has averaged approximately 1-2 percent annually which does not seem too bad. This translates to an increase of $6,750 on a $450,000 home assuming an inflation rate of 1.5 percent from one year to the next.
However recent events like Covid and U.S. tariffs that have heavily impacted the supply chain could drive prices up at a much steeper angle. Waiting for prices to come back down might seem like the right move however what you might see is increased mortgage rates and prices stabilizing at new heights leaving you in the worst case scenario – paying a high interest rate on higher prices.
Why not buy a used home? When you buy a used home you buy all of its unknowns. You buy past warranty appliances and mechanical, you buy the repairs and you buy the upgrades and renos you may want to make. In each of these circumstances you have to deal with higher costs over time that are impacted by the factors mentioned above.
You might think – “maybe I can roll these things into my low interest mortgage” but that depends a lot on knowing all of the things you are going to have to deal with in advance. A used home purchase can be a little like buying a Surprise Bag of candy – you really have no idea what you’re getting until you open it up.
Building a new custom home now takes advantage of the low interest rates above while providing you with a comprehensive warranty like the one Francis Family Homes Provides. FFH is also part of the Manitoba New Home Warranty program providing additional peace of mind. Every appliance and piece of mechanical is also warrantied.
Finally a new custom home is just that – new. It meets or exceeds the current building codes; The roof won’t need replacing; You won’t need additional insulation or new windows, and best of all, you will not be needing a reno or addition any time soon because you worked with your builder to ensure the home was exactly what you needed.
If you are considering a new home contact Francis Family Homes and schedule a FREE consultation – email Peter@hivedg.ca for more information.