Hints Of Rising Interest rates
Is now the best time to lock in your mortgage? Before jumping in with both feet one should look at, and compare, the effect an increase will have on your comfort level or your ability to pay. Locking in now will ensure your rate for a given period of time but it will be higher than your current floating rate resulting in an immediate increase in your mortgage payments.
While mortgage rates are at historicaly low levels two TD economists feel that Mortgage rates may soon rise if the real estate market does not cool off. August home sales were up more than 18% across Canada over last year and avergae home prices continued to rise. Continued surging home sales and rising prices may force the Bank to rethink its pledge to keep its interest rates at .025% till mid 2010. Should this happen we may soon see interest rates rise.
National Post ---The possibility exists that the Bank of Canada may have to break its conditional pledge on interest rates should the housing market continue its red-hot performance, economists at Toronto-Dominion Bank said Tuesday.
Read Paul Vieira's full article "Hot housing market could trigger rate hikes: TD" in the National Post (October 6, 2009).
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I've had a variable rate for a long, long time, and I also had a great rate on my line of credit, but I've already received a letter from the Bank, telling me that the interest rates on the line of credit will be going up, effective immediately. They raised it by a whole percentage point. I hope the news isn't quite that bad for the mortgage rate increase.
The way that the Feds keep manipulating things... it is really hard to know what is coming!
Australia raised their rates today. The first Country to do so in a year. Interest rates will be the next big topic and concern. I like your "text me", button!!!
Hi ~ I think I heard that the FED raised the rates today? I was working all day and I have not verified the rate change yet???
Kathy,
Good post. Interest rates only have one way to go.
Brian
Sylvie - we have been enjoying some of the lowest rates in recent history ... I remember 18 and 20% mortgage rates so even if they go up 1 or 2 percent it is still like free money to me. ... on the other side of the coin any one who is retired will appreciate any rise in rates if the have money in short term deposits.
Judi - exactly but I believe the signs are there for the short term
Jane - I noticed that it was one of the things mentioned in the article. ... the button leads to a text me widget on my web site
Monique - it likely will ... the following quote is from an article By Mark Felsenthal
"Hoenig cautioned that benchmark interest rates, which are now near zero, would be accommodative even at 1 percent or 2 percent"
Brian - I agree but from my perspective it is still like free money given the history of rates in Canada over the last 20 or 30 years ... However if borrowing for a purchase today you need to think about the possibility of rate increases and how it will affect your ability to pay at some future time when you have to renew your finances.