How low interest rates are feeding a massive real estate frenzy

Just when you thought interest rates couldn’t get any lower, HSBC shocked with an insured 0.99% variable rate mortgage.

Record low rates mean monthly mortgage payments are lower today than they were last year, despite rising prices.

But higher prices mean bigger down payments that a lot of first-time buyers can't come up with.

Realty’s John Pasalis operates in and analyzes the Greater Toronto Area market. Oakwyn Realty’s Steve Saretsky covers Vancouver.

They shared their thoughts on the effect of low rates on prices and how it affects buyer psychology.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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