Continued low interest rates good news

Another few weeks and spring will be gone, making way for higher fuel prices for the summer driving season, line ups at the provincial and national parks and lower interest rates for mortgages. Wait, what?

There are some trends that just aren’t trending right now, as interest rates typically climb higher during this time of year unless there is some form of uncertainty in the air.

At the beginning of March we saw some modest increases at the mortgage pumps, but they were dastardly swept away by BMO’s super low five-year no frills fixed rate of 2.99%. No one followed suit to match that program but every other lender felt the pain of the pressure this put on them and they all came up with their own solution to battle that program.

Needless to say that program is currently shelved, not that it was the best program out there as there were limitations tied to it that could hinder your future homeownership and financial plans, but it was a very pretty eye-catching rate nonetheless.

After that program quietly wrapped up lenders increased their fixed interest rates upwards to an average of 3.39-3.59% leaving us with a hook in our mouths wondering if this is the last time we’ll see these extremely low rates. But unfortunately the Greek problems were unsheathed by the improperly secured band aid that the EU placed on it leaving the markets weary once again.

At last month’s interest rate meeting Bank of Canada governor Mark Carney hinted that rates will likely be rising sooner than planned from the January meeting. But alas hints are just insinuations of the guessing game that he unfortunately gets to plod along playing and I’m doubtful that we’ll see those increases just yet as the EU uncertainty has caused a few minor depressions in the market.

It’s a tough job he has – playing possum with a roulette wheel – on one hand he has the Canadian economy on a rickety upward climb with jobs being created in some parts of the country and inflation creeping into it, and on the other hand he has to battle the markets and their super deflated bond yields – providing the consumer with super low interest rates for all of your shopping needs, whether it be a new home, car or furniture.

The most recent report detailed how home prices in pockets of the country grew 5-8% year over year in a time when they were expecting flatter growth than what’s become of it. Don’t get me wrong, I’ve been preaching about taking advantage of these low rates as houses are on sale because of low mortgage interest rates but also preparing my clients for the inevitable rate increases that will come some day!

Surprisingly these past couple of days brought with it another little gift for the excited home shopper. Another rate decrease, pretty much unforeseen due to seasonality but also kept on the down low as the big five pretty much didn’t say a thing about it nor did the papers write about it.

So my show home and open house hopping friends if you are out there armed with a pre-approval, good news has bequeathed you once again with a shiny new five-year fixed interest rate of 3.19%! Happy hunting!

Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments or questions at 403-343-1125 or emailed to jturcotte@regionalmortgage.ca.

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