While Canada’s low mortgage rates began to creep up at the end of 2016, mortgagors have been happy to see them remain relatively unchanged since then. However, the March Mortgage Rate Forecast recently released by the BC Real Estate Association suggests that those days may be coming to an end.
Citing a stronger Canadian economy and “a large degree of policy incoherence” in the United States, the report predicts an increase in mortgage rates throughout the second half of 2017.
“We expect rates to remain somewhat stable over the first half of 2017 before rising by as much as 20 basis points toward the end of the year, as markets gain clarity on the direction of US policy.”
The US Federal Reserve has already indicated its intention to raise rates multiple times this year. With this, the Trump administration’s seeming desire to increase spending while reducing revenues will probably succeed in spurring the growth of the economy, but it's also likely to increase interest rates both in the United States and globally.
So what does this mean to you – in numbers? The forecast predicts that posted rates will rise in the final quarter of 2017, from 4.64% to 4.74%, and that the average new mortgage rate would climb from 2.75% to 2.95% by the end of the year.
To see the full report, click here. If you have questions about how this could affect you or what your options are, feel free to get in touch.