I was speaking with my friend Jeff Reitzel, who is also my mortgage broker and a real estate investor. Jeff is one of the top mortgage brokers (with Mortgage Alliance Canada’s Mortgage Choice in Kitchener) in the country, and helps a lot of investors finance property.
I asked Jeff what he thought of the Bank of Canada’s interest rate hike:
To most it doesn’t have much of an impact – 0.25% on a 200,000.00 mortgage that would be $10.00 a week or so. Mentally though when there are increases it scares people.
We need to keep in mind that rates are still very low and increases are expected going forward.
My advice to clients is if you can’t afford your current mortgage if rates were 6-6.5% your probably should look in a lower range as rates could easily be in that range someday (likely not for some time but it is possible)
Are you concerned with the direction rates are going in? Personally, I do not think it is smart economic policy to artificially keep money cheap – but I do enjoy borrowing at low rates to invest in more property!
What about you?