Tariffs Up but Mortgage Rates Down

 A quick note… we’ve all heard about the Trump Tariffs. It will make everything more expensive. Canada and also in the USA. It will put people’s jobs at risk, we are likely to see layoffs, and economists are forecasting for a recession. This is if the tariffs do go through and continue for over a month.

Now that I’ve cheered you up, here’s the good news. And there is some.  Mortgage rates are headed lower. Fixed rates and variable rates. The old rule of bad economic news brings lower interest rates is true. A few things to point out about How interest rates are calculated.

Mortgage pricing has become very complicated. The best rates are for insured purchases. You put less than 20% down payment. For those of more than 20% down, interest rates are more expensive. Yes, sounds strange but it’s true. The insurance is default insurance which protects the mortgage lender against loss and this is why those mortgages are priced lower.

I’m seeing advertisements for interest rates under 4%. Great. But don’t get too excited as most of us won’t qualify for those rates. I’ve chosen not to advertise these low bait and switch rates as I think so few people fit that box that it would be unethical of me to promote those rates. I’d rather tell you interest rates are in the 4% to 5% range and then give a more accurate number after my office reviews your financial profile.  This approach means I will get less business but I will have very happy and satisfied customers.

Stay tuned for more news about rates and tariffs and the housing market. The next six months should be an interesting ride.

I hope you will enjoy this article and if you have any questions or would like to discuss I am always available.

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@canadamortgagenews.