Did you house hunters get excited this morning when you reached for your cup of Joe and the Star Phoenix to see that the Royal Bank dropped their mortgage rates? Did you start to think…gees those nice guys at the bank must know that home prices are skyrocketing and they want to give me a bit of a break on my new mortgage payment? If you did, then stop reading, have a shower and wake up.
Truth be told, we haven’t seen this type of inflationary pressure in years…sure core inflation was only 2.2% in April….within reason….but what about energy and food costs? What about the effects of this labor shortage? Is that coffee kicking in yet?....Rates are going up. If I were you, I would jump at a lower five year rate right now if you are looking for security, because it is probably a pretty good deal. The Bank of Canada will be making a decision on the spot rate on July 10th and if you can find me a person who tells you that rates are going down, I will find you a great piece of real estate in Climax….(sorry to the fine folks of Climax, I just don’t know about the real estate forecast in this pinnacle city).
I run a mortgage investment company, we are an alternative lender providing financing for families that the banks and conventional lenders pass up. These short term spikes in interest rates don’t scare me because I know it could really slow down the real estate market, making housing more affordable for everyone.