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Concerned with Rising Mortgage Rates? Don’t Be… For Now

Mortgage Rates Milton – Loewen Group Mortgages

After a spike in mortgage rates across Canada after the 2016 United States Presidential Election in November, a recent report suggests that rates are doing the exact opposite of what most experts predicted: dropping.

Many experts anticipated that with a new President in charge, interest rates would skyrocket due to higher inflation and increased borrowing demand. However, that hasn’t been the case, as five-year fixed mortgage rates fell by 20 basis points after a 52-week high.

Don’t get too excited just yet, though.

With the economic blueprint still underway in the U.S., it’s fair to assume that we are likely to see a rate hike within the next 12-18 months. As this article from the Globe and Mail points out, we still have to consider how specific factors in our own country play out as well. Exports, business investments and, of course, oil prices will all play a major role in what happens to mortgage rates.

So, how can you try and catch mortgage trends on your own? Canada’s five-year bond yield accumulates all information and organizes it into one number. This number is currently hanging around the 1.05% range, and unless it eclipses its two-year high of 1.33%, you will know that mortgage rates aren’t going to be drastically increasing.

If you’re just venturing out on the mortgage adventure, deciding whether you want a variable or fixed mortgage is one decision you’re going to have to make.

Typically, variable-rate mortgages have fewer penalties if you were to break them prematurely compared to fixed-rate mortgages, and you have the advantage of benefitting from rates drops. This doesn’t mean that it’s for everybody, though, as fixed-rate mortgages can provide peace of mind to people who like to budget a very specific amount each month for their mortgage.

Think of it this way; if rates were to increase by 2% points, would you be comfortable with it? Or, would you be stressing out worrying if you could make the payments? If the uncertainty of what the mortgage rate will be at moving forward is too much to handle, the safer bet is to choose a fixed mortgage.

If you’re considering buying a home, looking at refinancing or seeking debt consolidation, talk to one of our qualified mortgage specialists today to learn how we can help you secure low mortgage rates Milton.

Source: http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/mortgage-rates-continue-to-defy-predictions/article34817515/

 

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