A few other things to consider: Bank of Canada big picture influences on mortgage rates
1. Although the unemployment rate is at historical lows, the number of people looking for jobs is lower and wage growth is running at 2.7 per cent annually, which is below the 3.0 percent that has been consistent when there’s no labour slack on the market (Bank of Canada latest Monetary Policy Report.
2. Canada’s economy is growing super slowly – would you be happy with a growth in your investments by 2-3 per cent annually? We’ve lost our competitive edge on the global market. Our minimum wage increases may help, although I believe that it’s virtually impossible to own a home if you’re paid minimum wage. Growth is supported by population growth, including immigration. We’re also stifling innovation through further-and-further regulation. Is inflation really going to be a problem? We don’t believe it will and that the Bank of Canada should take a long pause before another rate hike.
3. There have been four interest rate hikes by the Bank of Canada since July 2017. Can another one be expected? Current 5-year fixed rates are at about 3.19 per cent to 3.79 per cent depending if you are buying or refinancing. You can still get a variable rate at prime – 1% (2.7%) or lower depending if you are purchasing or refinancing. We can walk-you through the analysis on Variable-rate Mortgage versus Fixed-rate Mortgage. The main reason for choosing a Variable-rate Mortgage would be if you wish to pay-off your mortgage sooner than the current amortization and you will be making extra payments towards principal in the next five years.
Here are some recent links to news articles that you may find interesting:
Call me or email me if you have any questions! We love helping people in Guelph, Kitchener-Waterloo, Cambridge and surrounding regions with technically-supported honest mortgage advice!
© Sandra Lastovic is the Principal Broker with the Mortgage Centre in Guelph. With over 15 years’ experience and holds a M.Sc. from the University of Guelph. She was recently ranked at the top 75 agents in Canada by The Canadian Mortgage Professionals annual survey and 2017 Most Influential Women in the Mortgage Industry. She can be reached at 519-763-3900 x1001 or www.skipthebank.ca™