Variable mortgage rates are expected to remain at their current levels well into 2014. Variable mortgage rates are tied directly to the banks’ prime lending rates which are in turn tied directly to the overnight rate set by the Bank of Canada.
The Bank of Canada, in September’s scheduled announcement proclaimed that it has decided to maintain the target for the overnight rate at its current level of 1%. It further announced that it won’t raise the variable rate until the rate of inflation threatens to exceed it’s 2 per cent target. The announcement further explains that “inflation in Canada remains subdued”, and that current conditions are expected to remain until sometime next year.
With variable mortgage rates now considerably lower than their fixed mortgage rate counterpart, its wise to at least consider them for your next mortgage. With an average mortgage balance of $300,000, borrowers can expect to save about $3,000 over the course of the year. If you’re unsure what mortgage will serve you best, speak with an accredited mortgage professional (AMP).