You’ll likely see fixed rates start to rise come the summer.  The Bank of Canada recently suggested that strength in the US market over the next few months will help boost the Canadian bond market.  As the bond yield rises you’ll see fixed mortgage rates start to rise as well.  Say goodbye to the record low 5 year rate, it may be quite a while before we see that again.

If home prices continue to accelerate you’ll likely see another set of new mortgage rules imposed by the Finance Minister.  This would slow market sales to ensure a housing bubble doesn’t form.  A market collapse would be devastating on the Canadian economy at a time of rebuilding.  The rules could include more restrictive income qualifications, larger down payments, and/or the loss of some specialized home financing options that are deemed more risky (gifted down payments).

The Bank of Canada is still indicating that it doesn’t expect to rise its over-night lending rate until sometime in 2015 or when inflation starts to cause problems to the economy.  This is great news for Barrie home owners who are currently locked into a variable rate mortgage.  They will continue to benefit from the lower borrowing costs vs. fixed mortgages.

Darren Robinson is a Barrie mortgage expert, dedicated to offering the best mortgage strategies and provides personal assistance to help people qualify for difficult mortgages and loans. Call 705.737.6161