How the Bank of Canada just affected your Mortgage.
This is a great article by broker in Toronto.
|Wednesday, 06 March 2013 20:42|
With a movement towards lower rates for a longer period of time what should you do?
This Newsletter will explain what the Bank of Canada said at this morning’s meetings and aid you in your mortgage decision making process.
The Bank of Canada and most economic indicators suggest that our economy is struggling and we need low rates and economic stimulus to support it well into the future. Whether you have a Fixed or Variable Rate Mortgage right now, or have an impending mortgage decision to make in the next 6 to 8 months reading this newsletter could really help.
There are few lines from the Bank of Canada’s meeting today that strike us as important enough to quote for you.
This is a change from the previous Bank of Canada message, and to us signals that low rates will be the norm for a while. The Bank of Canada had been indicating that the low rates we are experiencing were to be removed in 2013. However, now there is no expected removal date.
Secondly: “With continued slack in the Canadian economy, the muted outlook for inflation, and the more constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required,”
The outlined comments signal to us that the Bank of Canada remains comfortable with rates being as low as they are and keeping them there for some time. It should also be noted that the Bank of Canada is now less concerned with the amount of our consumer debt.
1. Be wary of the low fixed rate mortgage offers coming from the Banks, they come with horrible penalties!