With all the heat in the current real estate market in Canada could it change and could interest rates rise in 2021?
I can’t speak specifically to the prices for homes and the shift for people moving to outlying areas – that is a good discussion for you and your realtor. However, the low interest rates are flaming the fire. But can it continue and could interest rates rise in 2021?
There is pressure on fixed rates to rise and that could happen sooner than later in 2021. Only time will tell so it is a good idea to reach out to your independent mortgage broker and review your needs and possibly lock in a rate hold for peace of mind.
When we talk about rates there are variable rates and fixed rates. They move for different reasons. The Bank of Canada has indicate they will not adjust their overnight lending rate till at least 2022. This will keep the variable rates low. However, the fixed rates move based on the bond yield. Since the beginning of COVID-19 the government has been buying bonds to bring liquidity in the market and keep rates stable. As they reduce this strategy the fixed rates will start to rise. We can’t predict the exact timing or increase but rates could rise in 2021. We are seeing rates settle and some lenders advising fixed rates will shift upwards.
Stay calm and call your independent mortgage broker.