(Source: The Province)
Most people benefit if they make a correct projection on the direction of interest rates.
This is easily illustrated when you are deciding on either a variable- or a fixed-rate mortgage.
If you feel interest rates are going down, or are staying close to current levels, then the best option is likely a variable-rate mortgage. If you feel interest rates are going up in the near term, then locking in with a fixed-rate mortgage may save you interest costs over the term.
Central banks in the U.S. and Canada announce changes to interest rates on predetermined dates. In Canada, there are eight specified dates during the year.
Read Keith and Kevin Greenard’s full article “Study those interest rates” in The Province (October 13, 2009).