Mortgage rates could threaten recovery: OECD - Macleans.ca
 

Mortgage rates could threaten recovery: OECD

Organization fears cash-crunched Canadians will stop spending


 

The Organization for Economic Cooperation and Development says Canadians who rushed to take advantage of low interest rates during the recession to purchase homes and other big ticket items could find themselves squeezed by “any future adverse shocks” now that the country’s economic growth is expected to slow. In its annual economic report, the agency warned that household debt levels need to come down and that the country’s hot housing market should be cooled. The Bank of Canada is already moving to make borrowing more expensive by hiking interest rates—an outcome that could make life more difficult for those who over-extended themselves by taking on hefty mortgages. “Housing looks overpriced on the basis of price-to-rent and price-to-income measures,” the report said.

CBC News


 
Filed under:

Mortgage rates could threaten recovery: OECD

  1. Usually the variable rate mortgages can be switched to another term by paying only 3 months interest rate as penalty. So even though the prime went up, the cost of carrying a variable rate mortgage has actually gone nowhere. http://blog.canadianmortgageadvisor.ca/2010/09/pr

  2. Actually, you can switch a variable rate mortgage to a fixed rate term as long as it is at least as long as your original 5 year commitment WITHOUT paying a penalty.

  3. It would be nice if rates didn't go up,
    Buyers are still thinking…

  4. So they're saying we should be worried that people who don't have enough money to buy stuff might stop doing so? We lived in a seriously messed up system…