The Bank of Canada did not increase rates last month but there is talk of rate increases into the second quarter of 2022 along with some banks adjusting their rates sooner. The thought of higher rates may create anxiety and stress; however, let’s stay calm and look at the scenarios.
This article from Global News gives a good outline of what would happen between fixed and variable rates. Here are some highlights quoted in the article:
- It would take between four to six rate hikes by the Bank of Canada before today’s variable rate would be equal to today’s fixed rate.
- If you’re shopping for a home and want a fixed-rate mortgage, you should hurry to get a mortgage pre-approval which could lock in today’s fixed rate for 120 days.
- The closer to two percent than you can lock in, the better. But be careful about incurring pricey penalties!
- Be sure you’re either with a fair-penalty lender or that there’s no chance you’ll break your mortgage before maturity, based on the term you select,
We need to be realistic. It’s inevitable that rates will increase. As our economy returns to capacity and the pandemic affects ease, we will move to full recovery mode. That will cause rate increases. There is no need to panic. We can still work to find best rates and terms to make a mortgage feasible and comfortable for your budget.