I’m not sure if you have noticed since June of 2013 the value of our Canadian dollar is significantly lower from par just a year ago.
The Bank of Canada also continues to hold the line on its interest rate at 1%, but has signaled the possibility of lowering them. Which any financial expert would say is highly doubtful but most likely being said to weaken the Canadian dollar.
Why have a weaker dollar? Well those who have lived with a dollar at 70 cents US can remember the manufacturing export boom. A weaker dollar means greater exports into the US market, that should stimulate the lagging Canadian economy.
Keeping in mind that having a robust economy will have the Bank to try and create a “soft landing (for the booming) housing market.”
The bank rate has been at 1% since Sept 2010 and it should go up and not down accord to Organization for Economic Co-operation and Development. They want the Bank of Canada to increase it next year and double it to 2.25% by the end of 2015.
For home owners you will continue to enjoy low interest rates for many years to come. Maybe not the record lows we have been enjoying the past few years but definately significantly lower than the past. Home owners should keep diligent on the market forecasts and make every effort to pay down as much of their mortgage as possible.
Every 1% rate hike is similar to adding 10% increase to the cost of your mortgage. Having a lower mortgage will help you cushion the blow of higher interest rates when you need to renew your mortgage in the next 2 years.
So if you have questions on buying or moving from your house then call us and we will guide you through the real estate hoops.
Jas Jagpal, Broker ASA CNE ”We got your back!”
Accredited Senior Agent, Certified Negotiation Expert
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