Prepare for another increase in prime next week while fixed rates continue to drop
The majority of economists are still predicting that we will still have increases to prime of .25% in at least one of the two next Bank of Canada reviews. The next is scheduled for next Wednesday, Sept. 8th. The fact that predictions are a little less aggressive than a couple of weeks ago acknowledges that that Canada is still tied to the world economy. And the recovery of the world economy has slowed a little in the past few months. Anyone who is on a "variable rate mortgage" and wonders if it is time to lock in should still wait for a while. Although prime may go up as much as another .50% in the next few months that will still leave most people in variable rate mortgages at around 2.50% (+/-). Five-year fixed rates are still as low as 3.64% to 3.89%.
While fixed rates continue to fall, variable rate mortgages still have the greatest savings. Now, I could fill the rest of the page with a lot of rhetoric that I pick from the pundits...however, it is Friday afternoon leading in to the Labor Day long weekend and I'm not sure many will read on. If you have any specific questions regarding your mortgage I would be glad to hear from you.
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