Canadians will inevitably see mortgage rates rising in the near future but the hike will not be abrupt, an analysis by the Financial Post says. Citing several sources, the article argues that rates will increase but they will do so to levels that may still be considered relatively low by comparison to the last few decades:
The bond market—which mortgage rates are based on—has been rising fast and the big banks say their most recent specials will come to an end this week. But even with a 50 basis point increase, a five-year fixed closed mortgage of 3.5% is almost unheard of historically.
This week, RBC and TD raised their special offers on four-year fixed-rate mortgages by half a per centage point, bringing them from 2.99 per cent to 3.49 per cent. The rate increase will become effective tomorrow, Mar. 29. Bank of Montreal, the bank that introduced the 2.99 per cent rate in the first place, has not announced plans to increase its rate as yet.
Wednesday, March 28, 2012