We’ve seen a lot of interest rate activity this summer primarily in the longer term fixed rates. At one point the 5 year fixed rate was at 2.79% and now sitting at around 2.89% best rate. The golden question we keep getting asked is if it’s going to continue to go up.
We wish we had the answer to that, but we highly advise that if clients know they will be buying, renewing, or refinancing in the next 120 days that they lock in their rate now to eliminate the uncertainty.
Historically we’ve seen interest rates average around the 6% marker. That being said, there is more competition and more money being lent than in the past so we’re not sure if that average is as reliable as some are referring to it. Some forecasts say it will remaining fairly stable with current rates, while other forecasts are predicting up to a 1% increase 2014.
There is definitely the potential of continued raises to mortgage rates in the Canadian market. How much is another question as at the same time lenders want to see increased margin, they have to consider the possibility of slowing down the market by raising them too high and being counterproductive.
Time will tell and we’ll keep you posted.