July 19, 2010
Many mortgage-holders might feel as though they are at the whim of their bank when it comes to interest rate hikes. And you are, largely. But home owners can at least check out when the rate hikes will actually take place.
How, might you ask? Well, investors do it by checking out what the Bank of Canada is up to. If they raise rates, banks will likely raise rates too, which means you pay more!
But, good news! Although it seemed for a while there that the Bank of Canada had intentions to continually raise rates for– well, a really long time. For now, though, rates look like there will be a couple more hikes before they plateau.
According to the Financial Post:
“The bank will have a bit of a pause after we get a couple more rate hikes under the belt,” said Michael Gregory, senior economist at Bank of Montreal in Toronto.
Phew. So rates will increase for the next little, but banks have already been worked those hikes into mortgage rates through the preemptive mortgage rate hikes last spring. This expectation for deferring further rate hikes, however, have not been worked in. I doubt banks will lower rates, but they at least probably won’t go much higher.
So if you’re worried about rate hikes, the Bank of Canada will raise rates tomorrow. But don’t get confused, that doesn’t mean your mortgage rates will increase. They already have! You can probably put your worries aside for further mortgage rate hikes– let’s hope.