In what may seem to be turbulent times, tapping into the resources of a knowledgeable Canadian mortgage broker may be the key to secure the best mortgage product and interest rates for the needs of first-time home buyers. With a wealth of information available about the state of the overall economy, the direction of interest rates, and the wide array of available mortgage options, a trusted broker can help the novice homebuyer sift through and understand all the economic information that is out there.
For instance, retiring Bank of Canada Deputy Governor, Pierre Duguay, recently told Bloomberg.com that “there’s no inconsistency in the [Bank of Canada’s] projection for a ‘gradual’ increase in interest rates and an earlier statement that any decision will be ‘weighed carefully’ against the economic recovery.” What does that mean if you are considering how to finance your first home purchase?
Mr. Duguay went on the record to clarify that the Bank of Canada’s recent hike in its key trendsetting interest rate was “weighed carefully” against economic developments in both Canadian and other global economies, and that the Bank’s recent rate hike was made with an eye to a “gradual reduction in monetary stimulus” – i.e., further possible rate hikes.
Bloomberg.com then reports that the economists they surveyed predict that Canada’s central bankers “will [again] raise its key rate at the next decision in September and [will] pause at either its October or December meeting.” Meanwhile, we are also told that forward looking investors are projecting of 0.987% over that period (an increase from 0.975 before Mr. Duguay’s statement), up from the Bank of Canada’s now current 0.75% interest rate. Huhh?
If all this seems somewhat complex and obscure . . . relax. You are in good company. A trusted and knowledgeable mortgage broker can, however, put such projections in terms you can easily understand, while explaining the various mortgage options that are available to you as a homebuyer and recommending the mortgage product which best fits your needs.
The bank will raise its key rate at the next decision in September and pause at either its October or December meeting, according to economists surveyed by Bloomberg. The rate on the six-month overnight index swap, a measure of what investors bet the central bank’s rate will average over that period, rose to 0.987 percent today from 0.975 percent yesterday.
