Understanding mortgage Canada rates is important to help you decide on a variable mortgage or fixed mortgage. The current interest rates for Canada are below there historic levels. Presently central bank is charging its main customers (major banks like CIBC and BNS) an interest rate of around1%.
The banks then charge people like you and me an additional 2-3% above the 1% they pay the Bank of Canada. This is the lowest rate that is possible for the banks best customers at this time, which means the banks best customers would pay around 3% in Canada for a variable mortgage.
You will need to look at a number of factors to determine what will be the best mortgage rates Canada in the near future. A good indicator of what future mortgage rates Canada might be is to look at mortgage rates over the past 30 years, the range over this time period was from a low of 2% to a high of just over20%. Based on this you would expect to see mortgage rates rise back to a more normal level in the 5- 6% range.
There are a number of sources that you could refer to regarding interest rates. The most important would be the Bank of Canada, at this time the Bank of Canada has stated that they will not be moving up interest rates until the second half of 2012. With this information you can choose an open variable mortgage which comes with the lowest interest rate possible. A borrower can then later, if the Bank of Canada changes its position, convert to a fixed five year mortgage. This allows the borrower to save money while reducing the level of risk related to rising interest rates.
Mortgage Canada rates are also affected by economic activity inside and outside of the country, but the most important factor will be economic activity within Canada. When economic activity picks up and unemployment levels fall then the Bank of Canada may feel that the Canadian economy can withstand higher interest rates which can moderate economic activity.
The Bank of Canada also watches inflation rates and gross domestic product. The target inflation range is around 1% -3% above this level you can expect the bank to raise interest rates. The range for gross domestic product growth can be higher but if it reaches above 6% you should interest rates to rise.
To make a fully informed decision you should consult with a mortgage broker on fixed mortgage rates Canada verses variable mortgage Canada rates to determine where your situation fits in, if you would like some free advice on mortgage Canada rates please call us.
Current Mortgage Rates Ontario
As of January 2011 the interest for all mortgages have been held below the normal level by the Canadian central bank. The present Bank of Canada rate is very low at around 1%.
The major banks in turn charge their customers a small amount (around 2-3%) above the 1% they pay the Canadian central banks. Therefore as a customer of a large Canadian bank you would presently pay about 3% for a variable mortgage.
The challenge is to determine what will be the best current mortgage rates Ontario will be in two to five years. A good indicator of the best mortgage rates Ontario is to look at mortgage rates over the past 40 years. Over this time period the range for current mortgage rates Ontario was a low of 3% to a high of 21% in Ontario. Based on this information Canadians can expect mortgages rates to rise back to the normal range in the future.
To get a better idea of where the best mortgage rates Ontario will be in the future there a numbers of sources that can help you. First listen to what the Bank of Canada thinks the short to longer term interest rates will be heading. At the present time they do not foresee the mortgage rates in Ontario moving up till the second half of 2014. This is a very good signal that a variable mortgage might be the best option for most Canadians. The borrower can get a low rate open variable mortgage that can be converted to a fixed mortgage at some point in the future. Borrowers can save money with the lower variable interest and still have the option to lock in a fixed mortgage.
Current mortgage rates Ontario are also affected by economic activity inside and outside of Canada. Although, you should pay closer attention to the economic activity within the country. If the economy is starting to pick up the central bank may feel that the economy can withstand higher interest rates.
You should also be aware that inflation and the growth in gross domestic product can affect decisions regarding current interest rates. The Bank of Canada has a range for inflation around 2% -3%. Inflation rates above this level usually mean that you can expect interest rates to rise. The range for growth in gross domestic product can be higher. If the growth starts to reach above 5% you can also expect the bank to raise interest rates.
Low Mortgage Interest Rates
There are a number of different factors that every consumer should know before getting a mortgage. Your credit rating, income and to loan to value ratio are the three most important factors that affect interest rates. Our brokers can help you decide whether you should have a variable, fixed, open or closed mortgage. Call or email an application for a free quote on your mortgage.
A Loan-to-Value ratio for a property is equal to all mortgages on a property divided by the appraisal value of the property. If you own a home worth $1,000,000 and get a new first mortgage for $750,000 then your LTV ratio is 75% (i.e., 750,000/1,000,000)
Most banks and other A-Tier Lenders can loan up to 95% LTV provided that the borrower has a good income and credit score. Most non-bank lenders can lend up to 75% LTV but can overlook income and credit issues.
To get an idea of how low mortgage rates Ontario will be in the future, you should refer to a number of different sources. First listen to what the Bank of Canada thinks the short or long term interest rates will be. At the present time they have stated that they do not foresee the present low mortgage rates Ontario moving up till 2014. This is a signal that variable rates might be the best option for most Canadians. The borrower can get a low rate open variable mortgage that can be converted to a fixed mortgage at some point in the future. In this case the borrower can save money with the lower variable interest and still have the option to lock into a fixed mortgage.
Low mortgage rates in Canada are also affected by economic activity inside and outside of Canada. You should pay closer attention to the economic activity within the country. If the economy is starting to pick up across the country and unemployment levels are starting to fall then the central bank may feel that the economy can withstand higher interest rates.
You should also be aware that inflation and the growth in gross domestic product can affect current interest rates. The Bank of Canada has a range for inflation around 2% -3%. If inflation goes above this range you can expect interest rates to rise. The range for growth in gross domestic product can be higher but if the growth starts to reach above 5% you can also expect the bank to raise interest rates.
Please call us for more information on low interest mortgage.