Benjamin Tal, chief economist at CIBC , says that the days of ultra low interest rates are coming to an end. If you have ever heard Tal speak he's usually right on the money when he predicts rate hikes and drops. It is often the first question he is asked at presentations. He is a cautious man, as many economists are. For Tal to come out and say, the good times are going to end, is like having him stand on top of the CN Tower with a megaphone to make an announcement.
The figures and charts he sees come across his desk tell the story, months before it hits the newspapers. What Tal is suggesting in today's National Post article is that rates for variable rate mortgages are about to go up and that it's time to lock into a fixed rate mortgage. Economists feel that there's a 75% chance that in May overnight bank rates, which determine the interest rate for VRM's will go up
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Added to this , the posted fixed rates for a 5 year mortgage term went up on February 8th from 5.19% to 5.44%. If the fixed rate continues to go up then the switch to fixed rates will wipe out any benefit you gained from being in a VRM. As Tal says, |the window is closing"
If you want to discuss whether it's time for you to make the switch call me at 403-836-1201.
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