We're in the best place in Canada to deal with this...

Hope you're enjoying these last few weeks of summer!


The big news this week is that mortgage rates have risen significantly in the last month. It's pretty hard to believe that a five year fixed rate mortgage could be had for 2.89% only a short time ago. While this news isn't very positive, it is to be expected. Canadians have been warned about rising interest rates for some time now.


The latest rate increase combined with a reduced maximum amortization of 25 years and the implementation of the B20 rules will, no doubt, make it harder for some to qualify for a mortgage. That being said, we should be very thankful to be working in real estate in Alberta where the economy is good and the average family income is quite high. With the influx of people coming to Alberta and such a healthy economy we're in the best place in Canada to deal with the fallout from mortgage rate increases.


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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.


The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.


The next rate-setting day is October 22nd.

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