Mortgage rates are on the rise. After TD Bank and CIBC raised their posted rate for a 5 year closed mortgage by 0.25 percent earlier this week, RBC followed suit. The days of historically low interest rates seem to be coming to an end. According to Finance Minister Jim Flaherty the cost of borrowing money has nowhere to go but up and he expects the rates to increase further this year. Watch his comments on CTV News.
Earlier this year a cooling in the housing market was predicted but the Canadian Real Estate Association (CREA)released a revised forecast for Canadian home sales in 2011. The new forecast predicts that 439,000 existing homes will be sold during 2011 and that prices will rise with 1.3 per cent. CREA says that although mortgage rates will increase this year they will remain attractive enough to sustain the housing market activity.
If you are in "thinking mode" of the home buying process this may be the push you need to bring you in the "acting mode". Higher mortgage rates and a shorter amortization period - which comes into effect on March 18th (read my earlier post) - will result in higher monthly mortgage payments. So act now and contact me so I can help with finding you the right home and getting you the best mortgage deals available !