Are Canadian Mortgage Rates being effected by the US crisis? There's no denying it's been quite a week and we have seen some dramatic changes in the financial world over the past 10 days. The United States is in the process of the biggest overhaul of their financial system since the depression of the 30’s.
We’re now all waiting with baited breath for the biggest bailout package the US government has proposed in the form of 700 billion dollars. The impending package has already had an effect in the Canadian marketplace. A major Candian bank yesterday increased the long- term rates by .35%. We have also seen the Canadian banks pull back on their discounts on the variable rate mortgage products. The Bank of Canada expects Prime Rate should remain and possibly even drop if the US lowers their Prime Rate.
What does all this mean? Continued instability at this time, until the US proposal is passed and we see the fallout. After the proposal is passed we will need to see how the financial markets react to determine the direction of interest rates and the effect on both economies. The good news is that Canada is in a much better position to withstand the US crises. For now, it's a wait and see…
Jared Dreyer, Accredited Mortgage Professional
604 649-5991
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