What a year 2016 has been, from the many mortgage rule changes in Canada that created great confusion and questions to the most interesting US elections and now rising interest rates in the US.
The US Federal reserve recently pushed interest rates up by just .25% and they project three additional increases in 2017. This could set a trend for rising interest rates in Canada. However, the growth in the US economy has outpaced that of Canada which might somewhat delay the Bank of Canada from raising its benchmark rate right away but interest rates rising in the US will undoubtable spill over into Canada over time. In fact, some Canadian banks have already increased their five-year fixed rate mortgages.
Are rising mortgage rates a trend? Many think they are. Higher interest rates affect the amount of mortgage homebuyers can qualify for and therefore have an impact on home prices. We could inevitably see lenders increase rates for other loans such as car loans and lines of credit as well.
If you know someone whose mortgage is renewing in the next while or is looking to purchase a first or second home, introduce me so I could provide options that could protect them from rising rates.
2016 is coming to an end and most of us have family and friends not mortgages on our minds. I want to wish you and your family a wonderful holiday season and a prosperous 2017.