Why Mortgage Rates are Likely to Fall
The debt ceiling standoff in the U.S. earlier this month and the lingering concerns about debt in Europe sent stock markets into a frenzy this month.
Your investment portfolio or RRSP may have taken a hit, but the volatility may be good for your mortgage.
RateSupermarket.ca’s expert panel believes that fixed mortgage rates will be heading lower and variable rates will remain unchanged in the coming weeks.
That’s because the yield on government bonds dropped by more than 40 per cent in the last month. These rates are closely tied to five-year fixed rates.
Canada’s big banks have yet to decrease their mortgage rates, but the experts expect that to happen before the end of the summer.
Economists expected the Bank of Canada to starting increasing its key interest rate this fall. But with so much uncertainty in the global economy, central banks are afraid that hiking interest rates will squash the already-anemic recovery.
The U.S. central bank has vowed to keep interest rates unchanged for the next two years, and experts think Canada will be at a standstill until the start of 2012, maybe longer.
Variable interest rates follow the Bank of Canada’s key interest rates
Posted by Crystal Edwards
on August 18, 2011