Mortgage Rates! What Does The Future Hold?

Mortgage Rates! What Does The Future Hold?

TD Bank thinks interest rates will increase sooner than originally expected. Have you thought about how that could impact your financial situation?

TD Bank’s Quarterly Economic Forecast said: “With economic growth coming in strong this year, inflation should turn the corner. The Bank of Canada will look for confirmation, but is now expected to begin increasing its policy interest rate in October of this year, two quarters earlier than previously anticipated.”

Many high street banks are dependent on the Bank of Canada’s benchmark rate; when it increases, expect variable rates to as well. Canada saw strong first-quarter momentum with economic growth of 2.8%. That signifies a 0.5% upgrade from the previous forecast. Most recently, the Bank of Canada held its benchmark rate at 0.5%.

What has the Bank of Canada being saying?

“The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets.

Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Bank’s monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.”