At Robert Floris’s Mortgage Architects, Hamilton office, we get many questions every week from our valuable clients. The most frequent question is “what are your thoughts on where mortgage rates are headed?” and why not, it is a very important question. We try to educate our clients, definitely more personal than the bank. We write as if our roles were reversed and we were reading this article so we can all benefit.
    The great news is that mortgage interest rates are currently cheap and will be inexpensive for the foreseeable future. How do I know? Well, when the Bank of Canada governor Stephen Poloz is discussing pushing interest rates negative for savers, then you realize our economy is not doing so well. Central banks go negative when inflation is very weak, and the economy is not growing. As interest rates have dropped, people are affording more home and pushing prices higher. Canadians are addicted to this cheap money now owing $1.64 for every $1 earned. This is scary.
    Now the good news, with the economy so fragile, low rates are here for a while. The best part is that selecting either a fixed mortgage or a variable rate is a wise choice (although do not go longer then a 5 fixed year term). As the banks have reduced the spread on adjustable rate mortgages, they are maybe in the first time in history quite similar to fixed rates. If you are already a homeowner and have debt, money will never be cheaper to refinance while the housing market is so hot. Your bank account and stress level will thank you.

%d bloggers like this: