Rates usually drop leading up to a Federal election!

History tells us that mortgage rates usually drop leading up to an election. And 2015 has followed that trend.   It started in January of this year, when the Bank of Canada (BOC) Governor, Stephen Poloz, shocked Economists with his surprise 0.25% Bank Rate cut.

(CanadaMortgageNews.ca readers will remember, not all were shocked, as I had predicted a rate drop just days earlier).

Then in July, the BOC Govr did it again..  this time, it wasn’t as much a shock.  The Bank Prime was cut by another 0.25% after months of negative Economist data showed the Canadian economy was slowing. 

HERE’S A TIP… DON’T EXPECT FIXED RATES TO FALL MUCH FURTHER.

In case anyone didn’t notice, we are well below 3.00% for fixed rate terms of 5 yrs or less.  And Variable rates are just over 2.00%.   At some point, we need to understand, there just isn’t that much more room for rates to go lower.   Yes, we could see the BOC lower Bank Prime again.. but that may not change the Fixed rates this time.

If you study historical trends, then we can expect these rates to stabilize sometime after the election.. perhaps in mid 2016.

But hold on… this still doesn’t mean you need to jump into a Fixed rate… I think Variable rate will still serve most of us well…  Your mortgage choice will depend on your own personal situation, your needs, goals, plans and risk tolerance.

FEEL GOOD ABOUT TODAY’S RATES.

For some reason, I keep reading negative press about mortgage rates, real estate, personal debt levels..   Yet, I can’t think of one person that doesn’t want to pay a lower interest rate.  Kinda weird, don’t ya think?    Hey, enjoy the rates.. enjoy paying more towards your principal, enjoy saving more.. spend wisely!

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca