This conflicts with the Bank of Canada, which has signalled interest rates in Canada, which have been kept artificially low at one percent since late 2010, will not increase until the economy is on more stable ground; which might not happen until 2015
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Toronto, Canada (PRWEB) January 09, 2014
Canadalend.com, the leading low-cost private mortgage solution provider in Canada, is weighing in on the growing global pressure facing Canada to raise its interest rates in 2014 after the U.S. announced it will begin to taper its generous economic stimulus package this month.
Canadian Finance Minister Jim Flaherty said recently that Canada will face increased global pressure to raise interest rates in 2014 after the U.S. Federal Reserve said it will begin to taper its $85.0-billion-per-month bond-buying program to $75.0 billion per month. The decrease comes on the heels of economic data suggesting that the U.S. economy is beginning to improve. This will, in turn, increase demand for Canadian imports. (Source: Wingrove, J., “Canada will face pressure to raise interest rates, Flaherty says,” The Globe and Mail web site, January 6, 2014; http://www.theglobeandmail.com/report-on-business/economy/budget-surplus-could-be-bigger-than-forecast-in-2015-flaherty-tells-ctv/article16196939/.)
“This conflicts with the Bank of Canada, which has signalled interest rates in Canada, which have been kept artificially low at one percent since late 2010, will not increase until the economy is on more stable ground; which might not happen until 2015,” says Bob Aggarwal, president of Canadalend.com. “But because the Canadian economy is so dependent on the U.S. economy, the Bank of Canada will feel pressure to raise its overnight lending rate. Some speculate it could more than double its current rate to 2.25% by the end of next year.”
Aggarwal goes on to explain that any sudden rise in interest rates could derail Canada’s real estate boom. In December 2013, home sales in Toronto increased almost 14% year-over-year, while home prices climbed 8.9%. In Calgary, home sales increased eight percent in December, with housing prices up 8.6%. In Vancouver, December home sales were up a whopping 71% from a year ago, while the benchmark for properties increased roughly two percent to $603,400. (Source: Perkins, T., “Canada’s housing market finishes 2013 on solid footing,” The Globe and Mail web site, January 6, 2014; http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-housing-market-finishes-2013-on-solid-footing/article16203549/.)
While Aggarwal expects Canada’s robust housing sales and price environment to continue into at least the spring of 2014, he doesn’t see mortgage financing costs rising significantly. In fact, artificially low interest rates mean the first half of 2014 will continue to provide first-time home buyers with an excellent opportunity to get favourable mortgage rates.
“Potential home buyers looking to take advantage of the near-record low interest rate environment should contact an independent, licensed Canadalend.com agent,” Aggarwal concludes. “In most cases, they’ll get their clients pre-approved in 24 hours. On top of that, the pre-approval lasts for 120 days and is locked in from the day they start the process.”
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and financing concerns. To learn more about Canadalend.com, visit the web site at http://www.Canadalend.com.