2016 Outlook on Canadian Mortgage Rates

11 November 2015
Remax-Condos-Plus

The U.S. Federal Reserve Bank has indicated that they will be raising their lending rate in December. A number of experts are telling the public that this is the start of a climb back to significantly higher interest rates. But hold on there, currently the federal rate is 1/4 percent and it will rise by 1/4 percent to ½ percent in total. That’s the same rate as the bank of Canada rate right now, 1/2%.

Currently, both fixed and variable mortgage rates are under 3%. Do we expect a slight bounce in rates in the near term of ¼ percent? Probably. Our best guess is that rates will remain where they are in 2016.

While everyone seems concerned about whether buyers and homeowners can stand the stress of an interest rate increase, instead we should worry about Governments being able to pay interest on billions of dollars’ worth of debt. You can bet those Governments don’t want it and they won’t let rates rise much higher.