Canadian Mortgage Rates 2014 Everyone stays attuned to the rate announcement from the bank and more so the homebuyers. This time the announcement is in favor of variable rate borrowers. Mortgage rates of 2014 in Canada and United States are likely to increase by a small number. There is no reason to worry though, as the marginal increase will be limited to going up by only 75 basis points (bps). One bps is equal to a hundredth of a percent, which means the increase in Canadian mortgage rates would be a little more than 0.5%. On the other hand it is also likely to dip, so it is not a major cause for concern for homebuyers at the moment.
Pro Variable Rate Borrowers The chances of hike and drop are almost same in the future mortgage rates as the U. S. economy is gaining its balance after the recession. This change in rates poses to be good news for the ARM (adjustable rate mortgage) or variable-rate borrower as Bank of Canada indicates possibility of dropping rates too. The year 2013 witnessed a steady fixed rate for new mortgages. This stood true for long term (30 years) as well as short term (five years) investment plans with the latterâ€™s average of 3.29 per cent. The five year investment plan will now be available at an interest rate of 3.06%. Mortgage Rate Increase Cause The U. S. Federal Reserveâ€™s monthly bond purchase is cut down by a neat U.S. $10 billion. The Chairman Ben Bernanke attributed the reason to the dipping employment and low inflation. Employment percentage dropped to seven, which is reportedly the lowest in the last five years. However, the last three months in U.S. of the recent quarter has seen some positive changes in this sector by creating 200,000 jobs. Low inflation and unemployment are always a concern for economies and these two factors remain to be causes of concern for the U.S. but this decision of cutting down a huge chunk of monthly investment is sufficient to instill confidence in citizens that their economy is fighting back. Bank of Canada governor
Stephen Poloz expressed concern on the low inflation rate of Canada. The current figure 0.9% is quite low compared to the targeted two percent. Mortgage rates can remarkably change your economic condition and decisions like this from Bank of Canada can give you an insight to your future. Stay tuned for the next rate announcement which is due on March 5th, 2014. Read more at http://www.canadalend.com/