Long Term Mortgage Rates on the Rise
The writer is a Vancouver mortgage broker. He is an expert in bad credit mortgage applications. He is also pretty good with a skill saw.
The juggernaut of the Canadian housing market may be seeing a slow down in the next few months. The bond market has spoken and the Canadian banks have responded.
As I have written previously in this blog, the low cost rates fueled the real estate market in Canada big time. The problem is that the party had to end some time. And it looks like the bartender is about to dim the lights.
The bond market has signaled that the interest rates are about to move up. The banks have responded with a corresponding increase in five year rates. Not surprising since inflation is beginning to heat up and the Bank of Canada has stated that they will move to hold down inflation by increasing rates.
Hence, the reason the bond market has begun to increase rates. Long term mortgage rates are tied to the bond market and this is the reason why the long term rates are moving ahead.
Now the time honored question “Fixed vs. variable”. If you are risk adverse lock in now…if you can handle the uncertainty variable rates will be cheaper over the next five years.
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Tags: bartender, fueled-the-real, mortgage calc, Mortgage rates, real estate, reason-the-bond, uncertainty, variable-rates
