Buying Now vs Waiting for Lower Rates: What’s the Trade-Off?

by Shane Meahan

When interest rates are high, many potential homebuyers hesitate — “what if rates come down next year?” That hesitation can feel rational. But in real estate, timing is rarely perfectly predictable. Waiting comes with its own risks. Below, I compare the current Canadian mortgage landscape (using MMG Mortgages’ published rates), contrast with recent history, and explore when “buy now and refinance later” might make sense — especially in a market where conditions are shifting in your favor.

Current Mortgage Rates at MMG Mortgages

To ground our discussion in concrete numbers, here are some of the rates MMG Mortgages(MMG Mortgages - Alberta Mortgage Broker) is currently advertising:

1-year fixed: 4.69%
2-year fixed: 4.29%
3-year fixed: 3.89%
4-year fixed: 4.19%
5-year fixed: 3.99%
7-year fixed: 5.10%

These rates are “fully featured” (i.e., no hidden restrictions) as per MMG Mortgages Website.

Other rate aggregators for Alberta (and Calgary specifically) show that MMG is among the competitive lenders: for example, for Calgary, MMG Mortgages rates of 3.89% (for certain terms) are shown among the better available rates in that market. (Rates.ca)

Given those rates, we can refresh our framework and examples.

A Snapshot: Where Canadian Mortgage Rates (and MMG’s) Stand vs Recent History

Let’s place MMG’s rates alongside historical context:

In 2020–2021, fixed mortgage rates (5-year, etc.) were considerably lower — for example, posted 5-year fixed rates often ranged in the 2.5–3.0% range (or even lower in some promotional/discounted deals), and variable rates (prime-based) were much lower still.
In 2022 and early 2023, rates spiked, with 5-year fixed often in the 5.0–5.5% region in many markets.
Today, MMG’s 5-year fixed rate at 3.99% is more attractive than it has been in recent years, while shorter fixed terms (3- or 4-year) also remain competitive at 3.89% and 4.19%.

So the environment is mixed: long fixed rates are expensive, but intermediate fixed-term options look more palatable.

Market Dynamics: Why Buying Now May Be Less Risky Than You Think

Even with rates this high, there are counterbalancing forces in the real estate market that can make “now” more appealing:

Less buyer competition
High borrowing costs exclude some buyers. That softens demand and gives more leverage to motivated buyers.
More inventory & longer days on market
Homes are staying listed longer. You have time to shop properties, inspect thoroughly, negotiate, and include favorable conditions.
More “deal room”
Sellers know demand is muted. They may be more willing to reduce price, absorb extra closing costs, or include incentives.
Less risk of runaway prices
In a cooling market, you have less fear of being outbid at the last minute — though bidding wars still occur in desirable locations.
Strategic term selection
Because shorter fixed terms are relatively more attractive now, buyers can pick a term that balances interest cost and flexibility, rather than locking into an expensive longer rate.

These dynamics mean that you may be able to negotiate a better purchase price or more favorable conditions — partially offsetting the higher interest cost.

“Buy Now, Refinance Later”

With MMG’s current rates, the “buy now and refinance later” strategy still makes sense — but it looks a little different now that the 5-year fixed rate is sitting at 3.99%, a very competitive option compared to the higher levels seen in recent years.

Benefits (with MMG’s rates in mind)

You can lock in your purchase now in a stable market with more negotiating leverage.
The 5-year fixed at 3.99% provides long-term stability at a rate that is attractive by recent standards.
If you prefer flexibility, the 3-year fixed at 3.89% keeps your payment almost identical while leaving the door open to refinance sooner if rates drop further.
Either way, the ability to negotiate a lower purchase price in today’s softer market helps maximize your overall savings.

Challenges to Watch

Refinancing costs (legal, appraisal, discharge, and penalties) still apply if you break your mortgage before maturity.
Qualification risk: your ability to refinance later depends on your credit, income, and debt load at that time.
Timing risk: rates may not fall as quickly or as much as expected, so refinancing opportunities may not materialize right away.
Opportunity cost: locking into 5 years at 3.99% may mean you miss out on lower rates if they drop quickly, while taking a shorter term could mean higher rates later if the market moves the other way.

Illustrative Example (Using MMG’s Rates)

Let’s run a scenario using MMG’s current rates:

Home purchase price: $600,000
Down payment: 20% ($120,000), so the mortgage required = $480,000

Option 1: 5-Year Fixed at 3.99%

With a 25-year amortization, monthly payments on $480,000 at 3.99% would be about $2,526.

Option 2: 3-Year Fixed at 3.89%

With the same amortization, monthly payments on $480,000 at 3.89% would be about $2,491.

That’s a difference of roughly $35/month between the two terms — fairly small. This shows how competitive the 5-year fixed is at 3.99%, especially compared to the much higher 5-year rates of recent years.

Why This Matters

If you want stability and predictability, locking in at 3.99% for 5 years makes sense.
If you want flexibility to potentially refinance sooner, the 3-year at 3.89% gives you that option with only a modest monthly savings today.
Either way, compared to the peak rates of 2022–2023, today’s MMG offerings make buying now far more attractive.

Why Waiting Could Cost You More

Some buyers are tempted to sit on the sidelines, hoping for lower interest rates. But here’s the reality:

Rates may not fall as quickly as hoped — and even if they do, you could be competing against a flood of buyers rushing back into the market, driving prices up.
Inventory is higher today than in past years, and homes are staying on the market longer — giving you more choice and negotiating power right now. When demand returns, those conditions will disappear.
Sellers are more flexible today because of slower sales. If you wait, you may lose the chance to negotiate discounts, repairs, or concessions.
Locking in stability now at 3.99% (5-year fixed) means securing one of the most competitive rates in years, while still keeping the option to refinance if rates go even lower later.
Delaying costs money: continuing to rent, or passing up today’s deals, often costs more than the potential savings from waiting for a slightly lower rate.

In other words, waiting may feel safe — but the market conditions today (more choice, more negotiating room, and competitive rates) are unlikely to last. Acting now puts you in control and positions you to win whether rates drop later or not.

Final Thoughts

With MMG Mortgages offering a 5-year fixed rate as low as 3.99%, buyers have an opportunity that hasn’t been seen in years. This is a competitive rate compared not only to the peaks of 2022–2023 but also to many historical averages. On top of that, shorter fixed terms — such as the 3-year at 3.89% — provide flexibility for those who want the option to refinance sooner.

Pair these attractive rates with today’s softer market conditions — more inventory, longer days on market, and motivated sellers — and buyers have more negotiating power than they’ve had in years. This means you’re not only securing a competitive mortgage rate, but also potentially getting a better purchase price.

The “buy now, refinance later” strategy is still valid, but with rates already under 4% on a 5-year term, buyers don’t need to wait to take advantage of great financing options. You can lock in today, enjoy stability, and still keep the option to refinance if rates decline further.

Waiting may feel tempting, but it carries risk: prices can rise quickly once more buyers re-enter the market, and today’s selection of homes won’t last. Acting now positions you to get the best of both worlds — today’s competitive rates and today’s buyer-friendly market conditions.