Mortgage Interest Rate Decisions
“Recent Rises In The Prime Lending Rate Should Be Factored Into Your Toronto Mortgage Interest Rate Decisions”
Over the last several months, the market has speculated about interests rates in general going higher over the foreseeable future. In order to get a better sense of what was going to happen and provide options for securing either fixed or variable interest rates, many Toronto mortgage holders made a mortgage application to lock in the interest rates at the time for 120 days.
After all the initial discussion regarding rate hikes, the market settled down for a while, largely due to the ripple effect from what was going on in other financial markets such as the U.S. and Western Europe to name a few.
But now we’re at a time when many of these 120 day interest rate freezes on residential mortgage rates from the spring are coming due, and this is happening right at the time that interest rates are spiking up and continue to look like they may go higher.
This has narrowed the spread between the current variable rates and the fixed rates that many individuals still have locked in 120 days. So before time runs out on the applications they made, its time for them to once again consider fixed or variable interest rates because once the freeze period is over, longer term rates are likely going to be higher with variable rates creeping up.
As we always say, there is no accurate way to predict exactly where the market will go with respect to interest rate rises so it mostly comes down to your own assessment of risk and how much risk you can afford to be carrying in a variable rate position.
If rates start to continually climb up, many mortgage holders will get trapped in a variable rate in that variable mortgage interest rates could soon rise past the levels long term rates were this spring leaving and now there will be no option to lock into the current level of available fixed rates as they will be gone and adjusted upward as well.
If you have a locked in rate and the time period is about to expire, make sure you review your situation closely and make the best decision possible for your future cash flow. Once these rates lapse, they may not return to the same levels for some time.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel