While the phrase “what goes up must come down” technically refers to the force of gravity, it is a phrase that has been on the mind of most people, especially real estate investors and those with variable-rate mortgages, in regard to interest rates. Every time the Bank of Canada and other central banks drop their key interest rate, we sit back with bated breath, wondering how long it will be before the lower rates have had the desired impact on the economy and it is time to raise them again.
Since the factors that would push the interest rates up are so dynamic and unpredictable, it is challenging to forecast when we will begin to see higher rates. For example, how much inflationary pressure is being felt and whether it is a short-term or long-term situation affects how long we’ll need monetary stimulus in the form of reduced interest rates to stimulate growth.
Since the Canadian economy has been doing well overall as of late, even with the additional waves of COVID-19 having an impact, it is likely that we can expect to see some movement in interest rates before long. How long that will be is difficult to say, but there has been some speculation that it will occur sometime in the middle of 2022.
It is important to note that, while interest rates are expected to remain low for several more months, there has been a change in the approval process. Tightened credit conditions can make it more challenging for some borrowers to take advantage of the lower interest rates. You shouldn’t let that stop you from investigating financing your projects as soon as possible before the interest rates begin to trend upward.
At Donna Mullen & Associates, we are committed to educating you about your financing options and sharing information that is pertinent to your lending decision process. We want to help you secure the right mortgage for your situation that involves getting the best interest rate and the best terms for your situation. We can help you overcome any challenges you face and show you that it is often possible to find a way. If you would like to take advantage of the low interest rates in place right now, don’t wait. Call us today!