Mortgage rates have been on a rollercoaster ride over the last few years. This is due to the uncertainty surrounding the future of the housing market. After hitting an all-time low in 2016, mortgage rates slowly rose. However, they are still relatively low when compared to historical averages. There is no guarantee that mortgage rates will continue to stay low. Keep reading to learn more about the current state of mortgage rates in Canada and what you can expect in the coming months.
What Are Canada’s Current Mortgage Rates?
Mortgage rates differ from one lender to the next. However, the average rate for a five-year fixed mortgage is currently around 3.25%. This is slightly higher than last year but still low compared to historical averages. Generally, the forecast by the Central Bank is that the rate will likely increase by 0.75% as of September. On the other hand, the banks’ lowest 5-year variable rate is 4.25%.
A mortgage broker can help you secure a lower interest rate on your mortgage. They have access to various lenders and can help you find the best deal possible. Additionally, they can help you navigate the complex world of mortgages and ensure you understand the terms and conditions before signing anything. However, not all brokerage agencies are effective; hence do your research on your target broker before entrusting them with your business.
For instance, check the reviews on Google and other platforms to see what other customers have to say about their experiences. Also, compare the fees charged by different firms to ensure you are getting the best value for your money. When looking for the best Ontario mortgage rates, work with a competent and reputable mortgage agent. They understand the ins and outs of the industry and can help you get a great deal on your mortgage. You want to be sure that you are getting the best possible rate to save money over the life of your loan.
What Is Causing Mortgage Rates to Fluctuate?
Several factors can affect mortgage rates, such as:
The Strength of the Canadian economy
The economy has a direct impact on mortgage rates. When the economy is strong, interest rates tend to rise. This is because there is more demand for loans and investments. On the other hand, when the economy is weak, interest rates usually fall. This is because there is less demand for loans and investments.
Inflation is when prices for goods and services start to increase. It can cause interest rates to rise as well. This is because the cost of living increases when inflation is high. As a result, people need to take out loans to keep up with the rising costs. At the same time, investments become less attractive when inflation is high.
The Bank of Canada’s Monetary Policy
The Bank of Canada’s monetary policy can also affect mortgage rates. The Bank of Canada uses monetary policy to influence the economy. The Bank of Canada will raise interest rates when the economy is doing well to slow it down. Besides, the Bank of Canada will lower interest rates when the economy weakens to encourage growth.
Changes in Government Policy
The government can also affect mortgage rates. For example, the government may raise interest rates to cool down the housing market. On the other hand, the government may lower interest rates to encourage people to buy homes. Generally, changes in government policy have a direct impact on mortgage rates.
What Does the Future Hold for Mortgage Rates?
No crystal ball can predict the future of mortgage rates. However, a few factors may cause rates to rise shortly. For example, interest rates will likely rise as the Canadian economy continues improving. Additionally, if inflation levels start to increase, this could also cause rates to rise.
The Bank of Canada’s monetary policy will also play a role in determining the future of mortgage rates. Despite these potential increases, mortgage rates are still expected to remain low by historical standards.
For the homebuyers, it can only mean one thing – they should act now and lock in a low mortgage rate while they still can. If you are considering buying a home or renewing your mortgage, now is the time to do it. Mortgage rates are at historic lows, and there is no telling how long they will stay that way.
Mortgage rates in Canada are still at historic lows. However, there is no telling how long they will stay that way. If you are considering buying a home or renewing your mortgage, now is the time to do it. Work with a competent and reputable mortgage agent for the best mortgage rate.