Expect Mortgage Rates To Rise in 2010
While the economic recovery is still ongoing, signs from our neighbors to the south indicate that the Fed will be increasing the U.S. based lending rate in the near future.
Canada is expected to follow suit, which will likely see our prime rate go up somewhere between half a percent and one percent over the next 3 to 4 months.
While there is no guarantee of exactly what will happen or when it will happen, the probability is strong that a rate rise could be soon upon us.
At the same time, financial forecasters are not predicting large increases for the rest of the year, but the pattern to upward movements in interest rates now appears imminent as the economic recovery strengthens.
For mortgage holders with floating interest rates, this may be a good time to review your longer term options and consider locking up the current historically low rate levels available for 3 to 5 year terms.
For those of you contemplating mortgage refinancing or debt consolidation, there is still a great opportunity to take advantage of the low rates that have now been in place for the better part of two years.
One of the key things to remember with low interest rates is that when rates are low, small increases can have big impacts on your cash flow.
As an example, a one percent increase in interest rates may not seem like much, but if you’re currently carrying a mortgage with a variable interest rate of 2.25%, a 1.0% increase just saw your total interest payment increase 45%. And if you’re repayment is based on a long term repayment amortization, your overall monthly payment has also increased at least 40%.
While the current low rates have allowed many Canadians the ability to afford getting a first home or upgrading to a larger on, now is the time to look at making sure you’re going to be able to cash flow repayment well into the future by considering locking in the great long term rates we have available today.
If you’d like to discuss long term mortgage rate options or even a mortgage refinancing scenario, then I would suggest you give me a call and I’ll make sure you get all your questions answered.
Click Here To Speak With Mortgage Broker Joe Walsh.
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