Mortgage rates are going up - April 2011

Most major  banks in Canada have announced that their  5 and 10 year mortgage rates are going up. This was done in anticipation of the central bank raising it's prime rate.

The result of higher rates may be a slowdown in the real estate market.

The market has been hot in the winter months and activity normally increases during the spring. The rise in interest rates may cause buyers to rethink their buying decisions. Another impact is on first time buyers where fewer people will now qualify for a loan.  This will reduce the number of buyers on the market resulting in a reduction in selling price as houses will take longer to sell.

The central bank is increasing the rates in an attempt to cool down the market. If you plan on selling this year, do it now when the market is still hot and prices are high.

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