Plaza on yonge condos . Higher mortgage rates come sooner than expected?
Plaza on yonge condos . Higher mortgage rates come sooner than expected? After Wednesday’s interest rate meeting, the Bank of Canada decided to leave the current 0.25% interest rate unchanged, but has let out the wind that it will advance the time of raising interest rates from the earlier forecast of 2023 to the second half of next year.Please Visit: Plaza on yonge condos to Get Your VVIP Registration Today!
Data released in early march by Ratehub.ca, a Toronto-based interest rate comparison website, show that Canada’s most common mortgage rate, the minimum five-year fixed rate, has risen 25 basis points to 1.64 per cent.
The latest data just updated by the website show that the lowest interest rate has risen to 1.68%, and some have passed the 2% mark:
James Laird, co-founder of the website, said: “now is the best time for owners who hold floating rates to consider locking in fixed rates.” According to him, even if the central bank will not raise interest rates any time soon, the optimistic economic outlook means that fixed interest rates will continue to rise this year.
“since home buyers have to get advance approval and the interest rate they receive can be maintained for up to 120 days, it is time to lock in the interest rate so that they can quickly enter the competitive spring market,” Laird said. “
The Bank of Canada has sharply raised its economic growth forecast for this year to 6.5% from 4% at the beginning of this year, and forecasts a growth rate of 3.7% in 2022 and 3.2% in 2023, an outlook that is more optimistic than many Canadian economists.
Benjamin Reitzes, an economist at BMO Economics, commented, “from cautious to very optimistic, the Bank of Canada made a U-turn in three months. Although we still have a long way to go to change interest rates, the central bank has taken the first step towards quitting quantitative easing, which is clearly a more hawkish statement than the market expected. “
But the news has added fuel to the market: it has not only pushed up bond yields, but also pushed up the Canadian dollar to its highest level in nearly a year.
In fact, before that, there was already wind that interest rate hikes would be advanced. Bloomberg reports that the market has expected the central bank to raise interest rates in 2022, and swaps suggest a 50% chance of a rate hike by this time next year. Interest rates may be raised three times in the next two years, or five times in the next three years.
A survey of Canadian economists conducted by Finder.com also found that their position on interest rate adjustment has changed.
In an earlier survey conducted in March, more than half of economists thought current interest rates would remain for two years or more. But in a survey conducted before the Bank of Canada’s decision on Wednesday, 88 per cent said they now thought the interest rate would remain for two years or less, and more than half (54 per cent) thought the current rate would rise in the second half of 2022.