The following is some advice for potential homeowners from Trevor Gloyn of Canada Mortgage and Housing Corp. on questions from editor Barb Livingstone:

Calgary Herald ArchiveTrevor Gloyn of Canada Mortage and Housing Corp.

Question: When was the last time interest rates were this low in Canada? Answer: Lenders are providing fiveyear fixed mortgages at around four per cent, while short term variable mortgage rates are being offered just below the five-year rate.

In previous periods of economic downturn, such as the early 1980s and the early 1990s, mortgage rates increased.

In recent months the opposite has happened.

Question: What can a new home buyer save in terms of interest payments given the reduction in rates?

Answer: A lower mortgage rate generally reduces the amount of interest paid.
A shorter amortization period and a larger down payment also reduces interest costs.

Question: What is the average difference in prices for houses in Calgary this year, compared to a year ago or two years ago?

Answer: Following several years of strong seller’s market conditions, a decrease in existing home sales — and an increase in the supply of homes listed for sale — have caused markets to move towards balanced or buyers’ conditions.

As a result, house prices will see reductions this year and minimal, if any, growth next year.

Last month, the total average residential price was $372,114, down 11.3 per cent from $419,396 reported in March 2008.

The average price during the same month in 2007 was $415,321.