Interest rates made home buyers look beyond their comfort zone in 1979
Interest rate of almost 15 per cent drove property seekers to less desirable districts
In the housing market of November 1979, there wasn't a lot of good news.
As the CBC's Fred Langan reported on The National, the mortgage rate had reached 14¾ per cent.
High interest rates might have been great for those who had money sitting in the bank, but not so much for those shopping for a home.
"Some owners who have to renew their mortgages are selling their houses, because they can't afford the extra monthly payments," said Langan.
Up from 11% just a year earlier
Anyone in the position of taking out a loan for a mortgage, or renewing one, was feeling the strain.
A monthly mortgage payment of $192, renewed at the current rate, was boosted to $245.
Previously, the mortgage rate had been 11 per cent.
Wendy Glaholt and her husband were looking for a house in the neighbourhood in which she grew up. But, said Langan, they were going to have to "lower their standards" because of high mortgage rates.
"We can't possibly buy in this area now," said Glaholt. "We've got to look for cheaper houses in a different area, which is kind of disturbing because we really counted on this area."
Buying a mortgage, not a house
The cost of taking on a new mortgage was even propelling some people to choose the mortgage first and the home it went with second.
"If a couple are looking for a house at a certain value, they tend to ask me more about the mortgage and financing than the house," said real estate agent Rob Burton.
His company featured listings whose chief attribute was a mortgage as low as 11¼ per cent, rather than such mundane concerns as location or number of bedrooms.
