2010 Canadian Mortgage Forecast
2010 will be a great year for borrowers!
This is hard to believe given that we are slowly recovering from the worst credit and financial crisis in world history.
However Canada was not impacted as hard as other countries because the strength of our government regulated banking and financial services sector.
As borrowers, we are still enjoying historically low interest rates and this situation will remain for some time to come. At least for the first 6 months of 2010.
Indeed, many borrowers who have existing fixed rate mortgages that renew in 2010 , will enjoy significantly reduced monthly mortgage payments as a result of renewing at the lower rates in 2010.
Those of you who borrowed or tried to borrower mortgage money in 2009 may have experienced difficulties with lenders going out of business or tightening credit rules.
Don’t worry though, because 2010 will see a new batch of lenders coming to the Canadian market place. Many of these lenders will offer a greater variety of mortgage products and solutions, than what is currently available in the market place.
Moving into 2010, from a mortgage rate perspective, both the Variable Rates and Fixed Rates will remain stable for up to the first 6 months of 2010. So those of you renewing your old mortgages at this time should be happy.
For those of you who have Variable Rate Mortgages and are following Prime Rate, understand that Prime Rate may go up slightly in Summer or Autumn 2010, as our economy improves and inflation rises.
Remember: when the economy is doing great, prime rate is generally high and when the economy is doing bad, prime rate is generally low.
Given our recession, no wonder Prime Rate is so low.
However if Prime Rate does go up, don’t expect a significant increase because our economic recovery is in a delicate phase and any major increase may have the impact of spooking borrowers and thereby slowing down our recovery.
For those of you with Fixed Rate Mortgages, they will remain historically low, but expect a slight increase towards the early part of summer.
Moving into 2010, the Five Year fixed rate mortgage is around 3.90% which is absolutely amazing.
However, understand that the fixed mortgage rates are based upon bond yields and it is expected that the bond yields may increase into mid and late 2010, which means you will a corresponding increase in fixed mortgage rates. Once again, don’t expect fixed mortgage rates to increase significantly.
For those of you planning to finance real estate, 2010 should be a great year for you.
Interest rates will remain at historical lows and the credit markets are slowing opening up again.
And if you are looking to finance but have not decided when, don’t forget to take advantage of a mortgage preapproval from MortgageQuote.ca because we may be able to provide you with up to a 120 rate hold on your approval, so you don’t have to worry about rates going up on you.
Thank you.
Anoop Bungay
President,
MortgageQuote Canada Corp.
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