Rate Changes May Be Coming Earlier Than Expected

Sat, 13 Mar 2010 01:57:07 +0000

The general consensus has been that the Canadian government will not be raising the prime rate until late this year. However it is becoming more and more evident that the housing market in general is growing at an incredible pace and is hotter than ever. Although this can be a good thing, it can also cause additional speculation and a possible housing bubble. In addition another reason rates may be going up soon is that inflation is increasing as well.

Although the finance minister has said he will not raise rates until at least June of this year 2010, In my opinion rates will be going up come the next monetary meeting this summer.

But don’t go sounding the alarms, of course they will probably not raise rates by a whole % point or anything crazy like that. Currently prime is set at 2.25% and I would venture to guess that prime will increase to 2.5 or 2.75.

In retrospect that is still a fantastic rate, and if you are thinking about doing a refi you still have time to lock in great rates. On another note, if you are carrying a variable or floating rate mortgage and are considering locking in within the next 3 months or so its best you get that done now, before the prime rate jumps a bit in the summer.

At the end of the day, although Canada is probably in the forefront of recovery from the worldwide economic turndown we are still not out of the woods yet and thus rates will still remain low until at least late 2011, and will probably not return to pre reccession highs until 2012 or somewhere around there.

Of course that is just 1 mans opinion!