One of my friends Bev Gay, who owns STS Mortgage Pros in Kitchener Waterloo, sent me this analysis of the mortgage market:
Time for an update on the forecasts for interest rates. Central Bank rate is the Banks borrowing rates-we borrow at prime plus or minus. Prime right now is 2.25% – if you have a Secured Line of Credit most are at Prime + 1%
Bank of Canada meeting is this Tuesday which we do not have a concern over but thought I would send this out regarding future predictions.
Remember if your bank calls you about early renewal or to try to win your mortgage because they know it is not with them -it is still a good idea to check things out with me and then make your decisions accordingly –Remember the bank staff are sales people and I work for you… I recently saved a client a $7700 mistake.
Typical 5 yr rates are around 3.79-3.89%- depending on where I go with a 120 day lock in.
The dates for the Bank of Canada meetings are as follows for 2010; March 2, 2010, April 20, 2010, June 1, 2010, July 20, 2010, September 8, 2010, October 19, 2010 and December 7, 2010
Bev also sent this article that appeared in the National Post last week:
Bank of Canada urged to hike rates after June
With Bay Street convinced the Bank of Canada will maintain its pledge to wait until July to begin raising interest rates, the debate now turns to how aggressively the central bank should behave thereafter.
In the view of a paper prepared for the C.D. Howe Institute, the central bank should act with zeal. If it wants to get ahead of the inflation curve, the bank should raise its benchmark rate by 50 basis points at every scheduled rate announcement until the middle of next year, the paper said.
Michael Parkin, an economics professor at the University of Western Ontario and member of the think-tank’s monetary policy council, said "steep" increases would be required to make up for keeping the benchmark rate so low for so long.
The paper comes a week before the Bank of Canada’s next interest-rate statement, scheduled for March 2 and the same day Mark Carney, the bank governor, held an annual meeting with leading private-sector economists in Ottawa.
The bank cut its benchmark rate last year to a record low 0.25%, and made a pledge — conditional on inflation — to keep it there until the end of June in an effort to pump up the economy amid the financial crisis. Analysts say the move has worked. Figures on gross domestic product, to be reported next week, should indicate the economy grew roughly 4% in the fourth quarter, above the central bank’s own expectations. And inflation is closer to the bank’s 2% target earlier than envisaged, although analysts suggest price increases could lose some steam in the weeks ahead.
You can read the whole article here: http://www.financialpost.com/news-sectors/economy/story.html?id=2602124#ixzz0h1PH0ftv
You can reach Bev Gay at bev.gay@stsmortgagepros.ca or 519.896.6021.
Rates will be going up this year, its just a matter of when, and how much. To take advantage of the current interest rates, contact me for a list of great investment properties available right now.
For more information on the real estate market, send me an email at Benjamin@BenjaminBach.com or call me directly at 519-772-4376
