Should you get a fixed-rate or variable mortgage? In these strange times, fixed has a rare edge Nov 23rd
Did you hear the news? Or did you miss it? Last week the Bank of Canada announced they would stop buying Canada Mortgage Bonds. But it seems like nobody is talking about this.
Why should you be paying attention to this?
The buying of Canada mortgage bonds helps to keep fixed mortgage rates low. The Bank of Canada announcing they would stop this method of quantitative easing, could and probably will put pressure on fixed mortgage rates. But that may not happen right away as it takes a few months to work its way through financial markets.
Bank of Canada Governor, Tiff Macklem, has said they will keep the overnight rate as is or lower for the next three years, possibly even longer. This will help to keep short-term interest rates and variable-rate mortgages low. As we’ve seen fixed and variable-rate mortgages drop steadily since the beginning of Summer.
How low can they go? I’m not sure we’re going to see 0% interest rates (although that would be great for consumers or anyone borrowing money) but we are still trending downward, believe it or not…