Mortgage choices
The kind of mortgage you choose will influence how much interest you pay on your mortgage and when you pay it. Variable-rate mortgages may have lower starting interest rates than fixed mortgages right now, and they tend to be popular when rates are more volatile or are expected to go down. Fixed-rate mortgages currently have higher rates than variable-rate mortgages, but as rates rise, the fixed rate may mean you pay less in the long run. Plus, with the fixed rate you get the additional stability of knowing the total amount you’ll owe over the term so you can plan around it.

Market shifts
Though it’s far from certain, rising rates and inflation may cause some buyers to hold off on purchasing a home. In turn, this could reduce demand for real estate, which would bring down prices. While there may be some merit to this, demand has been outstripping supply for years in markets across the country, and any cooling-off period may not be significant enough to make a major difference to the cost of buying a home. In fact, according to a recent BMO survey, more than three quarters of Canadians expect housing prices to continue to increase over the next year. There may not be a straight answer on whether the market will cool and by how much, but it’s a trend to keep eye on if you’re considering purchasing property.

Pre-approval rates
Getting pre-approved for a mortgage means that the lender reviews your personal information, such as your credit score, your income and your debt and tells you how much they’re willing to lend you. This helps you set your house-hunting budget and gives you time to do due diligence on a property. In times of rising rates, it also means you lock in your interest rate sooner – and potentially avoid imminent hikes. Look for a bank that guarantees your rate for at least a few months.

Find more information at bmo.com/mortgage.