Over the past five months, Canadian banks have hiked interest rates by more than a third.
Past News ReleasesRSS
Toronto, Canada (PRWEB) August 26, 2013
Canadalend.com, the leading low-cost private mortgage solution provider in Canada, is weighing in with its expert opinion on major banks hiking up their mortgage rates and how this will impact homeowners already saddled with heavy debt loads.
After years of near-record low mortgage rates, Canada’s big banks are beginning to hike interest rates in earnest. The Royal Bank of Canada, TD Bank, the Bank of Montreal, and Laurentian Bank of Canada all raised their interest rates recently. On Tuesday, August 20, the Bank of Montreal raised the interest rate on its five-year fixed mortgages to 3.79% from 3.59%; less than six months ago, it offered a five-year mortgage rate of 2.99%. The following day, the Royal Bank, Canada’s largest bank, announced it had increased several of its residential mortgage rates, including fix posted rates. (Source: “TD, RBC follow other banks in hiking mortgage rates,” CBC.ca, August 22, 2013; http://www.cbc.ca/news/business/story/2013/08/22/royal-bank-mortgage-rates.html.)
“Over the past five months, Canadian banks have hiked interest rates by more than a third,” says Bob Aggarwal, president of Canadalend.com. “Those higher interest rates translate into higher monthly mortgage payments, which means homeowners will have less money to put into other spending.”
The Canadian Real Estate Association reported that July’s existing home sales were up a modest 0.2% month-over-month, but up 9.4% year-over-year. The national price of home ownership in Canada climbed 8.4% year-over-year to $382,373, in spite of tightened mortgage rules and lending guidelines. (Source: “Canadian home sales hold steady in July,” CREA web site, August 15, 2013; http://creastats.crea.ca/natl/index.htm.)
“Higher interest rates also mean fewer qualified buyers; suggesting some first-time buyers might be considering a home sooner rather than later to avoid further rate increases that are all but certain,” Aggarwal adds. “For some, it will take longer to save money to get into the market, while other first-time home buyers will find they are no longer able to afford a home.”
“The fact of the matter is, it costs more to buy the same house today than it did this past spring. That said, interest rates are still relatively low; however, thanks to an improving Canadian economy, they will continue to climb,” Aggarwal concludes. “For first-time home buyers or those looking to refinance, now is the perfect time to contact their nearest licensed Canadalend.com agent. Because they’re independent, they can search all of Canada’s banks and lenders, looking for mortgages best suited to their clients’ needs.”
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 assists 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.