How Rising Interest Rates Could Affect Home Buyers

How Rising Interest Rates Could Affect Home Buyers

Over the pandemic, Calgary has been a strong seller’s market. While several factors contribute to the state of the Calgary real estate market, one of the most important factors is the interest rate. For a while, interest rates were very low and many home buyers took this opportunity to purchase homes, which in turn drove up prices. Now, the Calgary real estate market, and all of Canada for that matter, is seeing an increase in interest rates. While this means fewer home buyers are currently interested in buying and therefore lowering prices and competition, it also means expensive mortgages and other complications for current Calgary home buyers. Here are some ways the interest rate spike may affect home buyers and how a Realtor® can help make purchasing a home possible.

Interest Rate Impact On Home Buyers

Mortgage Rate Fluctuation
Even though the prices of homes are finally lowering, rising interest rates will affect the availability and amount buyers qualify for. Mortgage rates will be higher than they were over the last few years and you may be denied a mortgage that you otherwise may have qualified for several months ago. If you are considering becoming a home buyer, speak to your Realtor® about your options for a fixed mortgage rate instead of a variable mortgage rate to help prevent future changes, and discuss when this option is ideal given the interest rate fluctuation. A fixed mortgage will ensure that your mortgage doesn’t increase when rates continue to rise, but that also means you will be stuck paying the rate you agree to now even if interest rates decline. An experienced Realtor® can help you determine what the best move is and they can use their real estate knowledge and insight to predict changes in interest rates.

Market Navigation
As interest rates go up, it will likely mean housing becomes more available and the real estate market, which previously favoured sellers, will become more balanced as people are no longer competing for limited housing inventory. This puts home buyers in a tricky situation, as they try to juggle buying a home before interest rates go up while reaping the benefits of lowering home prices. Navigating the market during this time will be more complex, but an experienced Calgary Realtor® can help you know when is the right time to buy.

As interest rates rise, more people will be in the market for lenders. As a prospective home buyer, you will also need to find a home lender who can give you a fair deal. Doing this on your own can be very difficult, especially during an interest rate increase. When you partner with a Calgary Realtor®, you will receive access to their network of lenders so that you have a selection of lenders to work with and can find the right one for you and your needs.

As interest rates go up, sellers understand that their prices need to go down to compensate. Fewer people will be able to afford high-priced homes as well as high-interest rates and this combination should help drive home prices down. An experienced Realtor® will be able to use this and other information to direct negotiations and get you the optimal sale price for your purchase. Although high interest rates can be problematic for home buyers, it also gives an opportunity for the market to balance out. Your Realtor® can help to combat the cost you pay in high-interest rates by negotiating the price and conditions of the home you are interested in purchasing to help you make your new home more affordable.


How Rising Interest Rates Could Affect Home Buyers

As interest rates rise, home buyers will struggle to find decent mortgage rates and purchasing a Calgary home could become more expensive. To combat this, partner with an experienced and knowledgeable Calgary Realtor® to help you navigate the market and your mortgage. A Mel Star team member can help you find a lender and negotiate confidently on your behalf to help make your home more affordable. The Mel Star team has over 40 years of experience with fluctuating interest rates in the Calgary real estate market and knows how to handle this shift. When home buyers partner with the Mel Star team, they gain access to this knowledge and experience. To become a Calgary homeowner, contact the Mel Star team at 1-403-861-9944 or fill out the online contact form.


A good Realtor® will represent you during the home buying process. A real estate agent should do the following for you when buying a home:

  • Book showings
  • Provide you with search tools or search for properties on your behalf
  • Represent you well in possible multiple offer scenarios
  • Keep a calm head during negotiations
  • Diligently navigate contracts and closing

When buying a home in Calgary, you should start by checking your credit score and determining an approximate budget. Then, come talk to the team at Mel Star. We can set you up with customized property searches, show you homes, and help you negotiate a great deal when you find the home of your dreams. To get a jump on exploring the Calgary real estate market, check out our featured Calgary real estate listings here.

In most sales, the seller pays the commissions for both the buyer’s and seller’s agents from the proceeds of the home sale.

A Star Team Working For You

A Star Team Working For You

The Mel Star team combines experience, insight, influence, connections, and access to the most cutting-edge marketing technologies to deliver results to buyers and sellers in Calgary’s Real Estates market. Our award-winning team will guide you through the process of buying or selling with smart strategies, skilled negotiations, and a customer-focused approach. Connect with us today to begin your journey to a successful Real Estate close. Call us at 1-403-861-9944.


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