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Bank Rates Going UP

Blog by Barbie Whitworth | July 21st, 2010

Welcome to the Homes On The Sunshine Coast Blog

 The following is an excerpt from the 'Canadian Press' regarding a change in the bank rates.  This is important information to buyers who may be waiting for the real estate prices to decline further.  It's important to weigh the value of waiting for a price drop while interest rates climb.  You may or may not come out ahead....

"The Canadian dollar jumped 0.91 of a cent to 95.71 cents U.S.

The rate hike will have an impact on variable-rate loans as the big commercial banks began raising their prime rates by a quarter point shortly after the announcement.

The prime rate increased to 2.75 per cent from 2.5 per cent, increasing the cost of consumer and car loans and variable mortgages tied to prime.

For example, a quarter-point increase in mortgage rates will add about $46 a month, or $550 a year, for a home owner who has a $340,000 mortgage for a 35-year term. It's about $90 per month higher than six months ago when interest rates were half a point lower.

But Laura Parsons, a mortgage expert at Bank of Montreal (TSX:BMO), noted that borrowing costs remain at near historic lows.

"It's a buyers' market and the rates are still really good. That's the problem, we've forgotten what a bad rate looks like," she said.

.......  BMO Capital Markets economist Michael Gregory said Carney gave himself an extra six months to return rates to normal levels, which he said would be in the two-to-three per cent range. Gregory agreed with the bank that a modest hike now was appropriate......

The buyers have arrived on the Sunshine Coast!   We look forward to talking with you and helping you to find the right home and property for you. 

Barbie and Shay
Barbie 604 741.1239
Shay 604 989.9888

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