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Are interest rates on the rise?
By Riki Unrau
The mortgage community was alive on Thursday with buzzing about possible future interest rate rises. Toronto Dominion Bank has released their projected numbers forecasting what the prime rate might do between now and 2019.
They say that the Bank of Canada’s overnight rate is expected to remain at 0.5% until 2017. At that point it is expected to rise to 1.25%. By the end of 2018 they expect it to reach two per cent jumping up to three per cent at the close of the following year.
“The five year government bond yield, which lenders base their five-year fixed rates on, is expected to close out 2015 at 0.9% before increasing to 1.6% next year. That upward trajectory is expected to continue in the following years; rising to 2.35% in 2017, 2.85% in 2018, and 3.3% in 2019,” TD Bank reports.
To put this into perspective, the current prime lending rate is 2.70% meaning that it could go up to six per cent by the end of 2019. That is quite an increase from what we are used to but is by no means the highest rate we have seen.
Back in the early 1980s it was almost 23%!
What does all of this mean for the average consumer hoping to buy or re-finance a home in the next few years? Simply put, interest rates are currently at their lowest since the 2009 financial crisis which was the lowest they have ever been. They can only go up from here so, if you are looking for the lowest rate possible, now is the time to act. However, don’t think that the low rate ship is sailing just yet. We still have at least another year to take advantage of these rates. After that, providing economic factors improve, say goodbye to those dirt cheap rates.
For more information on what these rates will mean for you be sure to contact your local mortgage broker or financial advisor.
– Riki Unrau is a Mortgage Broker with Invis Williams and Associates, located at 828C Baker Street, Cranbrook, BC V1C 1A2 – 250-919-6402. For more try: https://invis.ca/brokers/Riki-Unrau
