Les taux d’intérêt vont-ils encore augmenter?

Will interest rates rise more? – The Voice of the South

Since the beginning of the year, interest rates have undergone various increases, mainly due to the increase in the Bank of Canada’s key rate. Are you or soon-to-be homeowner concerned about the impact of higher interest rates on your mortgage loan? Are you wondering whether it will continue to rise so that, among other things, you can better manage your budget and predict the development of your financial situation? Here’s the answer to your question – and more!

What are the expectations for an interest rate hike?

Since the start of 2022, the Bank of Canada has raised its key rate on multiple occasions, notably in March, April and July. In less than a year, mortgage rates have doubled.

Make no mistake: This momentum will inevitably continue, and other similar increases are expected between now and December. They can also continue beyond, depending on the state of the economic situation.

Why do prices go up?

The reason for higher interest rates is mainly due to higher inflation. Its goal is to slow down the economy in order to interrupt or even reduce the current inflation, in order to avoid a recession.

The Bank of Canada plays an important role in raising interest rates on various mortgages. By raising the benchmark interest rate, it leads to increases for all the benchmark interest rates of banks and other financial institutions. Certain actions, such as quantitative easing or tightening, can have an effect on these actions.

Want to learn more about the topic or see how these increases might affect you? Contact the Hypotheque Facile Team!

How to limit the effect of increases?

Nobody can avoid higher interest rates. However, there are some strategies you can use to reduce its effects if you need to get a new mortgage or refinance for yourself.

The best way is to err on the side of caution. If short-term interest rates are lower, and therefore more attractive, it is important to take into account that they will continue to rise in the following months. So you should think about your decisions in the long term to avoid unpleasant surprises. However, the short term will give you a great deal of flexibility to re-evaluate your situation when the economy nearly recovers.

If you are a new buyer, it is appropriate to save more for down payment before purchasing a property. Also consider reducing the total of your other debts (student loan, car, etc.).

When will prices start to fall?

It is not possible to predict exactly when rates will fall, as it may take several months for the measures adopted to have the desired effect on the country’s economy. However, it should be noted that interest rates, like all markets, are cyclical. So they show ups and downs, but they always end up balancing out over time.

To get the best mortgage rate, regardless of the economic situation, consider turning to Hypothèque Facile mortgage brokers!

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