This is excellent news for Canada’s economy and rates may continue to rise. The variable rate mortgages will be affected by any rise in Bank of Canada’s prime. While the 5 year fixed could also rise, it is affected more by the Bond Market, which has also increased over the past month in anticipation of a rate hike. Historically 5 year fixed rates were at 3.09% in October 2014, comparable to today’s pricing.
This is the start of good news and market reaction and the potential for more. This may all shift, should there be underlying issues in our economy that have not surfaced. Real estate is going through a price correction and until this has levelled out, consumers will be cautious on both the buying and selling side. Kitchener, Waterloo, Cambridge and surrounding area are going through this same price correction.
Is it time to lock in? Maybe, however, you should be making an informed decision.
Locking in out of panic is usually not a wise choice. Compare your lock in rate to your present variable pricing, as you may be giving away much more than you think. Call a mortgage broker before you lock in direct with your lender, as there may be other options available. At the very least you will get independent advice and lock rate comparisons. Call The Mortgage Centre Kitchener Waterloo at 519-743-4365 anytime.
Remember, your bank or financial institution employee is looking out for the best interest of the Bank, not you!
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