Where Are Mortgage Rates Heading?

CMHC announced that the cooling down of the real estate market is finally here. We will see house prices and mortgage rates moderate throughout 2019 into 2020.

This aligns well with the information we obtained from industry experts at the Mortgage Professionals Canada National Conference in Montreal.

Many economists have been claiming these prime rate increases (now at 3.95{ea18e790148ddb141722068dfb73f9f74b06205fa18c7d39ece0e7144d0672b8} at most banks) are only cooling down the remainder of an extremely hot real estate housing market…so hopefully in London the pressure of having multiple offers are soon behind us.

One economist specifically, Benjamin Tal CIBC (image above), discussed how we are nearing comparable times to what the markets were like from 2007 to 2008 with the inverted bond. What does inverted bonds mean? This is where the 10 year fixed is almost side by side to the 5 year fixed. For example, today a 5 year conventional fixed rate is close to 3.94{ea18e790148ddb141722068dfb73f9f74b06205fa18c7d39ece0e7144d0672b8} and some banks have a 10 year special at 4.19{ea18e790148ddb141722068dfb73f9f74b06205fa18c7d39ece0e7144d0672b8} much like the fixed rates in 2007 where the 5 year was 5.65{ea18e790148ddb141722068dfb73f9f74b06205fa18c7d39ece0e7144d0672b8} and the 10 year fixed 5.75{ea18e790148ddb141722068dfb73f9f74b06205fa18c7d39ece0e7144d0672b8}. If you recall, in 2008 we saw the lower term products, 3-5 year fixed, quickly decrease.

In summary, CMHC and the economists say that everything is stabalizing and much like the past, we could even see some decreases on low term rates and also decreases to the prime rate and variable rate/Line of credit products.

To read more on CMHC Announcement: CLICK HERE

To read even furthur into Benjain Tal’s market forecast: CLICK HERE