The Best Mortgage Rates in London

London Key Stats

• London population: 366,151
• Dwelling units: 168,175
• Employment Level: 244,500
• Unemployment Rate: 8.4

Source: Stats Canada, CMHC

London Mortgage Rates to Moderate in 2013

Mortgage rates are expected to remain at historical lows for the first portion of 2012 before moderating later in the year. The CMHC forecasts that the one-year posted mortgage rate will be within the 3.1 to 3.6 range, with five-year posted rates in the range of 5.0 to 5.4 per cent. Rates are expected to rise in 2013 to 3.5 to 4.1 per cent for one-year, and 5.1 to 5.6 per cent for five-year mortgage rates.

Source: CMHC

London 2012 Housing Market Outlook

London is poised for the effects of a balancing market, as new restrictions on mortgage rules dissuade first time home buyers from buying this year. Demand for resale homes will rise in 2012 as move-up buyers purchase homes at higher price points. An improving job market, strengthening local economy and increasing population will also support housing demand.

2012 sales started off strong as good economic indicators encouraged buying, pushing demand for single-detached and apartment units higher than 2011 levels. However, condo prices dropped due to a less active first time buyer market – low vacancy rates show this market segment is staying within the rental market for the time being, but are anticipated to become active again in Spring 2013.

The overall average resale price in London will increase less than 2 per cent due to downward pressure on condo prices. However, this pressure will be offset by listings at higher price points purchased by resale buyers. Listings will peak in 2012 with market conditions remaining balanced.

Housing starts will increase in 2012 to just under 2,200 units, with a single-detached construction due to the city's long-term growth strategy. The MLS average price will reach $237,000 this year, up from $233,731 in 2011. This is expected to rise further still in 2013 to $240,000.

Source: CMHC Housing Market Outlook

London Housing Market & Mortgage Rate Forecast

• Population: 489,300 (Stats Canada 2009)
• A 1.5% employment growth is expected in 2010 and 2011.
• High unemployment rate
• Net migration to remain stable around 2,500 for 2010 and 2011.

London Mortgage Rates Will Slowly Increase in 2010.

The CMHC best case scenario, expect mortgage rates will continue to slowly increase in 2010 with a one year mortgage rate to be in the 3.6 to 4.8% range and the three and five year mortgage rates to be in the 4.2 to 6.7% range. In 2011, CMHC forecasts that the one year mortgage rate will be in the range of 5.0 to 6.0% whereas, the three and five year mortgage rate will be in the range of 5.6 to 7.2%. However, if the economy recovers at a faster rate than expected, mortgage rates may increase at a more rapid rate.

CMHC London area housing market

CMHC predicts a 5% increase in MLS sales in 2010, than easing in 2011. First time home buyers are expected to be impacted by increasing mortgage rates and rising prices. With the low mortgage rates experienced at the beginning of 2010, a large number of first time home buyers were brought into the market.

A balanced resale market will support modest price growth in 2010 and 2011. Resale prices will increase approximately 2% in 2010 and only 1% in 2011. Single starts will raise 9% in 2010, but decline in 2011 due to higher inventory costs. The average price of a single home will decrease nearly 3% in 2010 and is forecast to remain flat.

Unfortunately, the CMHC doesn't report on London specifically regarding the housing and mortgage market, however, we've included the closest surrounding areas.