Rise in fixed-rate mortgages will cost Canadians more to finance their homes and likely will cool housing sector

(Source: Globe and Mail)

Canadian banks delivered the first clear sign that the era of rock-bottom interest rates is over by suddenly hiking mortgage rates, a move that will cost Canadians more to finance home purchases and likely hasten an expected slowdown of the red-hot housing sector.

Surging home sales and prices were already expected to cool in the second half of this year as more listings hit the market and the Harmonized Sales Tax adds to purchase costs in Ontario and British Columbia.

Hikes on fixed-rate mortgages announced by three banks Monday are expected to contribute to the slowdown as home buyers face higher costs amid a growing expectation that interest rates are likely entering a phase of higher levels.

Read Tara Perkins’ full article “Canadian banks hike mortgage rates” in the Globe and Mail (March 30, 2010).

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