• mortgage interest ratesWhere Are Mortgage Interest Rates Going?

    This is the number one question I received as a mortgage broker. At our Mortgage Architects office located in Hamilton, Ontario on the East Mountain, we will try to simplify this. The easy answer to this question is: I do not know! There are only a handful of experts who are accurate in predicting the direction of mortgage interest rates. Unfortunately, I am not one of them.

    Influencers To The Cost Of Borrowing

    However, what I do know regarding the price of money is that it is heavily connected to two factors:

    1. Inflation
    2. Economy

    As the economy flourishes, the demand for money increases and the unemployment rate is low. In Canada, our unemployment rate is the lowest it has been in decades. More importantly, there is more pressure on prices. There is probably no better example than housing. What about oil? Several years ago the price for a barrel of crude was $26. Today, the same barrel is in the $66 range. This forces up the costs of everything including products and transportation. This is an excellent example of inflation. This is why mortgage interest rates have jumped by over 1% in the last year or a 48% increase!!

    Where is the value today? That is easy. It is with variable mortgage interest rates. For the last three years I have been suggesting to clients that they go with fixed mortgage interest rates. Why? Because mortgage interest rates had nowhere to go but up AND the spread between the fixed and variable was so smally, the variable mortgage interest rates were not worth the risk. Today, I ask them to consider a flexible adjustable variable rate. The spread between the fixed in the variable has grown and it offers some great savings.

    Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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    Thanks for reading!

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