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CategoryMortgage Rates

CIBC says..a hike in Bank Prime rate coming…and new mortgage rules won’t affect most of us.

Just released….

BANK PRIME RATE FORECAST

The CIBC’s Senior Economist, Ben Tal, says Bank Prime rate will start to increase this summer… but only by 0.50% to 0.75% by end of the year… and then will pause in 2011 to see where the U.S. rates are headed….  click here Feb 26 2010 CIBC Forecast.

Mr. Tal thinks this is “risk move” pointing to similar Bank of Canada action in 1992 and 2002 when the Bank hiked rates only to reverse the decision a few months later…

Mr. Tal also points out that real inflation is around 1.5% and will continue to remain low into 2011.

Does this mean we should lock in our variable rate mortgages?  For most of us, probably not… but if you aren’t sure, then speak with your Mortgage Broker.

NEW MORTGAGE RULES EFFECT

Mr. Tal sees the new mortgage rules having little effect on most of us.  Here are his calculations…

  • Increase down payment requirement for refinancing: 7%-8%
  • Increase down payment requirement for non-primary residence: 2%-3%
  • Increase qualifying rate on variable mortgages: 5%-6%

This is the first outlook I have seen…and it’s really not bad at all…   Enjoy the weekend… and GO CANADA GO!

Mortgage rates went down?

What’s this? RBC,  BMO and National Bank have lowered their posted fixed rates?  Yes, it’s true… the 5 year fixed rate is now 5.39%.  Bond rates have come down over the past few weeks after some concerns about the speed of the recovery.

These are posted branch rates…some banks advertise lower special rates of around 4.09%…. of course, there are even lower wholesale or discounted rates through the mortgage broker market…. speak to your mortgage broker to get current rates.

Variable rates aren’t expected to move anytime soon…  in fact, here’s one forecast for interest rates to remain flat for the entire year…. and I think this is very possible..  Happy Savings!!!

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