Economists suggest rate hike imminent affecting variable rates

Jeff Evans

Another new item of news with mortgage implications has come out today:

Pressure grows for Bank of Canada to hike rates

In sharp contrast to my variable mortgage outlook from one day ago, this new article talks about very strong growth in the Canadian economy the past quarter, and how there is pressure to raise rates as soon as next rate update in 5 weeks from now (the last update happened this morning and mortgage rates were unchanged).

These are strong indications of a mortgage rate hike being imminent which will affect variable rate mortgage borrowers. The extent to which they will raise the mortgage rates is unknown (if in fact they do raise rates). I do still believe that the upward limits of any mortgage rate increase will be largely handcuffed by the US Federal Reserve rates.

For borrowers who have variable rate mortgage at prime +1%, this might not be a bad time to consider a lock-in, with those borrowers receiving variable rates of 3.25% and five year fixed rates around 3.9%, it might be worth considering to lock into a mortgage at this time, or to refinance for a variable rate mortgage with a discount, where they are currently around prime -.25% to -.4% from many of my lenders.

Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

mortgage broker Vancouver BC
Good news regarding OSFI rule changes
Jeff Evans
No Comments
This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More
OSFI B20 mortgage guideline changes 2017 – Part 2
Jeff Evans
No Comments
This is a continuation of the article published here about the OSFI B20 morgage guidline changes for 2017. If you are familiar with mortgage brokers at all (which you probably aren't) you would know that we also have alternative sources of lending for situations where a mortgage borrower will not qualify with a prime institution.  We have what we call "B" lenders, who have higher rates but more flexible lending criteria, and we have private lenders, which are individuals and corporations who can lend money on on anything that suits them.Read More
OSFI B20 mortgage guideline changes 2017 – Part 1
Jeff Evans
1 Comment

B20?  Is that some kind of vitamin?

It certainly sounds like a vitamin, but unfortunately, it is something else altogether.  The Office of the Superintendent of Financial Institutions is the regulator for all federal mortgage lending institutions.  They set the regulations for mortgage companies like banks to follow (or ignore). The latest updates to the B20 mortgage regulations could bring some potentially very disrupting changes to the real estate market, especially if you are wanting to get a mortgage in Vancouver, or you are a mortgage broker in Vancouver. In summary:Read More