Image via WikipediaToday RBC and TD raised 5 year fixed mortgage rates by .25 % joining BMO and CIBC who raised their rates yesterday. Jim Flaherty, the Canadian Minister of Finance, warned that mortgage rates will continue to rise, which added to a chorus line of simliar warnings including those by the Bank of Canada Governor Mark Carney.
If you were listening to the evening news bank economists are saying they’re not sure where rates will end up. But you can believe Mr. Flaherty and Mr. Carney – rates have only one way to go - up!
The reason fixed rates mortgages are rising now is because swap rates – the rate lenders pay to borrow from each other – have been rising since the start of the year. So lenders are passing on this cost to borrowers by raising their fixed rates.
The reason behind the increase in swaps is that the markets are factoring in an interest rate rise sooner rather than later.
Therefore borrowers considering switching to a fixed rate should do so as soon as possible as there is every likelihood fixed rates will rise further in the coming days.
If you're carrying debt on high rate credit cards, department store cards, car loans, etc... now could be a good time to consolidate, particularly for those with large amounts of equity in their homes. Roll that credit card debt over into your mortgage or into fixed rate LOC and for some, it will mean thousands of dollars in annual savings, freeing up cash flow for other uses including paying down your mortgage faster.
If you were listening to the evening news bank economists are saying they’re not sure where rates will end up. But you can believe Mr. Flaherty and Mr. Carney – rates have only one way to go - up!
The reason fixed rates mortgages are rising now is because swap rates – the rate lenders pay to borrow from each other – have been rising since the start of the year. So lenders are passing on this cost to borrowers by raising their fixed rates.
The reason behind the increase in swaps is that the markets are factoring in an interest rate rise sooner rather than later.
Therefore borrowers considering switching to a fixed rate should do so as soon as possible as there is every likelihood fixed rates will rise further in the coming days.
If you're carrying debt on high rate credit cards, department store cards, car loans, etc... now could be a good time to consolidate, particularly for those with large amounts of equity in their homes. Roll that credit card debt over into your mortgage or into fixed rate LOC and for some, it will mean thousands of dollars in annual savings, freeing up cash flow for other uses including paying down your mortgage faster.
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