Canadian Mortgage Rate Will Go Down or Up

Just as it did in the US back in 2008, the trend of buying homes in Canada fell sharply when the economy went into decline and a housing market crash occurred. So how have things been looking lately in Canada and is the mortgage rate trend going to be up or down? As we move into the final months of 2013 those looking to buy into real estate in Canada have been warned not to buy on a whim, or panic just because you believe you can lock into a cheap mortgage.
It may be the advice you get from real estate agents but buying a home now is what many Canadians rushed to do during the summer, thinking that low mortgage rates were about to drift away forever and the trend for a rate rise was only just around the corner. In fact, August saw a spike of between 20 and 50 per cent in home sales during the month of August 2013.


Economists in Canada have been saying that the days of extremely low interest rates are about to come to an end, and unsurprisingly this sent many Canadians in to a panic that caused them buy now before the rates rise. But here we are in the fall season and there is no sign of that mortgage rate rise that so many economists were threatening. Mortgage companies are still offering good deals and even after the sales spike in the summer, rates available now are still on offer at 3.4% or less. Moreover, this rate can be fixed for the next five years, which is why an offer like this is still very appealing.
In the past five years since the economic downturn and housing market bubble bursting, there have been three false alarms over rate rises or rate decreases. The economy still sits in a position where there is moderate growth, keeping Canada out of recession and inflation rates are still keeping well within government recommendations.
It has been the case where bad news from economies in the US and Europe has meant good news for Canadian mortgage rates. Investors decided not to pour money into Europe teetering economy or that of the US, so it decided on Canada instead. This was down to large investment into governments bonds in Canada, and fixed rate mortgages are based on these yields, meaning good news for home buyers in Canada.