Friday, October 21, 2011
Reuters News agency just released a poll of 40 economists that shows that most economists believe that interest rates will not go up until the third quarter of 2012. This means that people with variable rate mortgages will be able to keep their low rates for another 9-12 months. The vast majority of these economists lowered their expectation of a rate hike for the next 4 quarters.
Economists often do not agree but 95% of them feel that rates will stay the same at the next announcement for the Bank of Canada Overnight rate scheduled for the end of October. This is based on the belief that Canada's economy will continue to weather the recession storm. In addition they expect inflation to remain low so a rate increase to slow the economy will not be necessary. If you are thinking about going for a variable rate mortgage you should know that lenders lowered the discount on their mortgages from Prime rate - .40% to Prime -.10% this week. The difference between a fixed rate and a variable rate now stands at .39%.
If you want to talk to someone about which rate would be best for you, contact me and we'll review your particular situation and you can make an informed choice.