I looked around the mortgage market this week to see what some of the driving trends are and where some of the best mortgage opportunities might be going forward.
We are certainly seeing some upward pressure on the fixed interest rates recently which has been driven by a rising bond market and some of the adjustments the banks have made in order to counter increased costs incurred from recent federal government rule changes. It is expected that there will be continued upward pressure on the bond yield and further federal changes later this year that will likely have the banks move rates up to pay for the cost of these changes. It is always past on to the consumer...
What we should take a note of, is that we are still below the fixed interest rates of 2 years ago that were the lowest in Canadian history at the time. So interest rates are still extremely low if we put some perspective on it.
Where there may be some opportunity going forward is with variable rates. The Bank of Canada sets the prime lending rate based on the performance of the Canadian economy and will only significantly raise it if there is significant growth that would push up inflation, as they do not want to slow growth with rising interest rates if the economy is slow. So with the economy creeping along, there is a good chance that variable rate mortgages could stay relatively low while these fixed rates rise.
Today we have a variable rate product that is available on a purchase of 2.1%.
Just a few thoughts,