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TAKE ADVANTAGE OF THE BUYER'S MARKET...MORTGAGE RATES TO MOVE HIGHER THROUGH 2010

MORTGAGE RATE FORECAST

MORTGAGE RATES TO MOVE HIGHER THROUGH 2010

Prospective homebuyers took advantage of historically low mortgage rates through the summer months, fuelling

a rebound in housing activity in BC and across Canada. The BC Real Estate Associations (BCREA)

expects a low interest rate environment to persist through 2009 and into 2010. Mortgage rates are forecast

to fluctuate within a narrow range near current levels for the remainder of the year, before rising

modestly through 2010 as the economy improves.

Declining interest rates since late 2008 have been the product of the worldwide economic downturn which

led to a global coordinated effort to mitigate further damage through fiscal and monetary stimulus. The

resulting cuts to short-term central bank interest rates, when combined with continued economic

weakness, higher investor risk aversion and lower expectations of inflation lowered bond market yields and

contributed to declines in bank administered interest rates for products such as mortgages.

Precluding discounts offered by lenders to clients with preferred credit histories, posted mortgage have settled

at decades-low levels during the last few months. The borrowing cost on a fixed-rate one-year term

mortgage remained stable at a record low of 3.75 per cent in August, after declining 320 basis points (bps)

from August 2008 to June 2009. In contrast, the fixed-rate 5-year term mortgage rate gradually edged up to

5.85 per cent in June after declining to an April low of 5.25 per cent (Fig.1). Despite this increase, the rate

remains near record lows and continues to support home-ownership demand.

READ THE FULL REPORT http://www.realtorlink.ca/portal/server.pt/gateway/PTARGS_0_92526_2381504_0_0_18/MortgageRateForecast.pdf 


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SHANNON BABCOCK
Buy Smart. Sell Smart.
Landmark Realty Chwk.
http://www.shannonbabcock.com
connectingu@uniserve.com
Tf: 1-877-858-2408
Cell: 604.795.1081

 

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