It’s steady as she goes for variable mortgage rates for the foreseeable future. Variable mortgage rates are linked to the overnight rate which is controlled by the Bank of Canada (BOC), and the BOC’s new chief, Stephen Poloz is maintaining the same cautious hand as outgoing chief Mark Carney.
When asked when we can expect to see rates rise Mr. Poloz replied, “The honest answer is, we really don’t know”. That’s because the economy would need to be in a much healthier state, and we’ve been waiting for an economic recovery for several years already. In fact, the recent Alberta floods, Quebec strikes and foreign economic woes have dampened previous forecasts pushing out a variable mortgage rate hike even further. Economic experts are now pushing out their anticipated rate increase dates into late 2014 or early 2015.
Bottom line is nothing new for variable mortgage rate holders. Hang onto variable mortgage rates that are at least 0.50% below prime as long as you can. If you are considering a new mortgage, a variable rate warrants serious consideration.