If you are thinking about buying a new home in the near future and are worried about an increase in the Canadian overnight interest rate after a pair of surprise rate reductions earlier this year to compensate for the sharp fall in oil prices and recent talks of a possible rate hikes by the U.S. Federal Reserve, an economist from the Canadian central bank does not think that this is necessarily cause for worry to potential Canadian home buyers.
Rhys Mendes is the deputy chief of the economics analysis division at the Bank of Canada. Speaking of the possible rate hike in the U.S. Fed rate, which is expected to occur as early as June, Mendes stated that the increase suggests that the U.S. economy is improving. When asked what impacts this may have north of the border, Mendes stressed that he believes this is good news because it signifies that the Canadian economy is also strengthening due to the two economic systems being intertwined. He added that because Canadian rate targets inflation and changes in the rate generally are based on the outlook for inflation, this does not necessarily signify that the Canadian rate will follow suit.
So if you are thinking about buying a home, contact a knowledgeable and experienced Century 21 King’s Quay representative today to learn more about the mortgage rates and current real estate market conditions.