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Should You Build or Renovate with High Interest Rates?

Updated: Dec 18, 2022

You bet.

The Bank of Canada raised the prime interest rate again this past week, so plenty of people and companies are reluctant to build. Think about this though: the interest rate was increased in order to curb inflation. Since there's less demand for construction, the construction costs will start to come down as builders become less busy.

Over the term of a refinanced mortgage or construction loan, interest rates will vary. Whether you borrow the money build while the interest rate is high or low isn't terribly relevant, but you do want to take advantage of lower construction costs. Knocking off 5%-10% from the amount you borrow will make more difference than starting a loan at 2% and ending at 7% than starting at 7% and ending at 2%.

Now is the time to design, and soon will be the best time to build.

Timing the construction industry is like timing the stock market - a tricky gamble. There is a better way to knock an appreciable amount off your construction cost: optimized design. My Tuning Report™ is a simplified cost comparison of building or renovating to get an ultra high-performance house.


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