The Organization for Economic Co-operation and Development has raised its expectations for economic growth in Canada this year compared with a June forecast.
The Paris-based economic think tank says it now expects the Canadian economy to grow by 3.2 per cent this year, best in the G7. That is up from its forecast in June for growth of 2.8 per cent. – The Canadian Press
There are several factors that lend to economic growth. As professionals in the real estate industry we naturally look at certain information; rising income and job stability, causing inflation. A thriving real estate market, like the one we have seen over the last year and a half. Lastly, record low interest rates like we have seen over the last 5-7 years. We have enjoyed the ride so far, but Canada’s economic growth is healthy and on the rise, so now we wait to see how interest rates will follow.
Knowing that the BofC adjusts interest rates to either stimulate economic growth, or follow trend with it, we are likely going to see rates continue to rise after their next meeting on October 25, 2017. With the potential rate increase in October comes proposed changes to regulations once again. This would see that all mortgages, whether high ratio (<20% down payment) or conventional (>20% down payment), will be qualified in a relatively similar manner. We now have “stress test” qualifying for high ratio mortgages, currently qualifying at the benchmark rate of 4.84%. If the new regulations come into play we will see conventional mortgages qualified at the contract rate plus 2%.
If you have been thinking of accessing equity in your home, or would like to refinance your home before these regulations are put into place, I would be happy to help! Now is the time to take advantage of your borrowing power.
Sandra Lastovic | 519-763-3900 x1001
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