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One recent report indicated that year over year prices on condos in the GTA have declined by about 2.5% between February 2012 and February 2013. For the first time buyer, this is fantastic news as affordability just went up. The other part of the report was that the sales volume has declined by about 20% which is more good news as it likely means that buyers have more choice.

So let’s look at the numbers based on a 1 bedroom condo downtown that sold in February 2012 for $350,000. At that time, 5 year fixed rate mortgages were approximately 3.09% depending on the lender. With 5% down, your mortgage (including mandatory high ratio insurance) would be $341,644 and the payment using a 25 year amortization would be $1,632.60.

Today, the same condo will sell for $341,250 (using the reports 2.5% decline in prices). Your mortgage is $333,103 and at the current 5 year rate available at 2.89%, the monthly payment will be $1,557.63.

Your saving is $75 a month which over the next 5 years, works out to approximately $5,000. This may not sound like an enormous amount of money, but we always say that it is better in your pocket than in the banks net income.

Sometimes we act like a herd of sheep and if everyone else is buying, we do too. Often, it is those that stray from the herd that win and now is a good time to go against the current.

*Piece written and shared by our friends at The Mortgage Centre: www.MortgageCentreToronto.com