Skip to content

Taginterest rate forecast

Posted Mortgage News

Sounds like a broken record…5 yr Bond rates remain low as do mortgage rates..

We’ve reached the middle of summer and there is very little to report… hey, that’s a good thing.. remember, boring is good when it comes to mortgage rates..

Remember those Experts that called for people to lock into a long-term fixed rate at or around 4.00% last year?.. Variable rates have been under 2.00% for over a year and recently went above 2.00%….   I do understand why some would call for us to lock in….but I’m glad I wasn’t one of them…

Look at today’s 5 year bond rate and it’s 2.29%… WOW!   That’s unbelievably low… the 5 year fixed rate is priced from the Bond market and normally, we will see a spread of 1.20% to 1.40% above that… so really, we should be seeing fixed rates as low at 3.50% but the Banks are taking advantage of the spreads and maximizing their profits…..

Let’s not be in too much of a hurry to improve bank profits….

Watch for possible increases in fixed and variable rates later this year.. but remember, we’re still near record low rates.. they will go up, but slowly… no need to panic… yes, this is boring news.. but boring is good…

Posted Mortgage Rates

CIBC Economist forecasts for low mortgage rates through 2011

Here’s some good news to end the week…

CIBC’s Avery Shenfeld was quoted as saying interest rates would remain low through 2011… hey, that’s a different message from what we’ve been hearing lately… complete article here..

CIBC has a good history when it comes to forecasting rates…  And I think his forecast makes a lot of sense…

Some of the fundamentals for the forecast:  an expected low inflation level, mixed in with 20% lower overall Canadian output compared with the peak of 2008…end result is less pressure for the Bank of Canada to raise rates as much or as quickly as we once thought…

But there are more factors that I think will cool our Economy somewhat…. HST coming in July… New Mortgage Rules coming into effect in a few weeks….continued slow Global recovery…. continued slow U.S. recovery…

Lower rates for longer period of time?   Hmmmm…wonder how the media can turn that into a negative story….(sorry, couldn’t resist the sarcasm).  Yes, it’s GOOD time to borrow money.. don’t let anyone tell you otherwise… these are historical lows….Enjoy!

(but before you go… It’s important to point out that Experts are expecting the Bank of Canada to raise their rate in June or July…. but that’s NOT a reason to panic or get nervous.. the Bank rate is at 0.25% and our Bank Prime is at 2.25%…  these are both RECORD lows…we’ve never seen rates this low…..we must expect increases to come)