Interest Rates, are they going up or down again?
Speculation regarding the mortgage rates seems to be a topic of discussion on a daily basis. Unfortunately, most of the information out there is either sensationalized by the media or often reported out of context, leaving the average person confused. This is not intentional but it does lead to incorrect assumptions which often become the new facts of life.
The important thing to understand about interest changes is that absolutely no one has the ability to see the future. No matter how complete the analyses, a prediction where rates will go is still a guess, educated or otherwise! After a few years of record low rates, generally speaking, they are expected to increase rather than drop. Easy assumption! However, how high and how fast they will go up is harder to accurately predict. Also, during these general trends there will be a lot of movement in both directions, increases & decreases, which also play a role in our mortgage decisions.
For example, the recent upward jump in the fixed mortgage rates was fuelled by speculation about the government issued bonds in the U.S. This speculation caused a shift in where the investors put their money. As a result our fixed rates paid the price. Some things did not happen as speculated and this allowed a small drop in our rates last week. Ongoing issues inside and, more so, outside of Canada continue to be potential drivers of increases or decreases in the fixed rates over the short term.
Where do you go from here?
Well, I would summarize the fixed rate situation as volatile and I suggest you move to lock in a pre-approval rate and make that purchase or do that refinance sooner rather than later. Also, you should consider the option of a variable rate as well. However, keep in mind that the choice of variable or fixed should be based on the tolerance level of each individual client first and the actual rate second.
Most Canadians are also concerned about the cost of purchasing a home or the ability to handle their existing mortgage obligations when interest rates increase. This is a good thing as it forces us think when making decisions about the largest financial investment/debt that most of us will ever have. Having access to the right information and advice can make this process much easier to handle.
With access to many lenders across Canada, an independent mortgage professional can provide you with the choices you need for making smart decisions as well as reducing your stress and saving you money. Do not restrict your choices to one financial institution. They will promote the products and terms that are generally the best for them. Meanwhile, an independent mortgage professional with Centum is looking out for your best interest®.
I can get a low rate locked in for the next 120 days to protect you against possible increases while you find the right property. In addition, I will get you a lower rate if it drops before your mortgage closes. The Best of Both Worlds!!
You, your family, and your friends are all invited to contact me for a personal review of the rates and options that are available. You will NOT be charged for my services. My contact information is located here on my home page for your convenience.