It might be hard to imagine, but in 1982, the five-year mortgage rate was up around 18 per cent. That’s more than five times the rateswe generally see today! Despite that, real estate was still considered to be a good investment, and many people bought and sold their homes during this time regardless.
Since then, interest rate trends have been on a steady decline, leveling off in recent years to remain near an all-time low. As the economy continues to improve and inflation remains low, those who predict Calgary mortgage interest rate trends believe there will be little change in rates over the next year. It remains a great time to buy a home! And by working with a qualified mortgage broker to plan your future you can receive the best rates available on the market today.
When Increases Happen
As a result of climbing interest rates on government bonds, TD, RBC and Scotia Bank announced small rate increases this June. These were triggered by an increase in the interest rate on government bonds, which are typically bought when confidence in the economy weakens. At the time, it seemed possible that the Bank of Canada would raise the prime rate, but just a month later optimism has grown. It now appears less likely that we will see a prime rate increase in the near future, and investors are putting funds back into growth investment options.
A Prediction is Not a Guarantee
Determining long-term rate trends can be tricky business, complicated by a variety of factors. Even with the occasional storm that appears suddenly to darken the horizon, economists’ long-term forecasts are still considered the best source for information and opinions about interest rates. A recent thirty-year analysis done by Forecast.com suggests rates will remain much the same for the next year, and they believe there is a 90 per cent probability that the 30-year mortgage interest rate will actually be lower in five years. These analyses change constantly and are updated frequently, so consumers should not take them as a guarantee. Historically, it has proven almost impossible for economists to make accurate long-term forecasts for interest rates. Just as you wouldn’t expect a meteorologist to accurately predict the daily temperatures for the summer of 2018, you shouldn’t expect economists to be able to predict exactly where rates will be in five years.
Getting the Best Calgary Mortgage Rates
Mortgage rates might not be predictable, but smart consumers can stay educated and plan ahead. Mortgage planning works best when done with a broker. Because brokers are experts in the housing market, they can help you understand all the information out there and determine how to incorporate everything into your financial goals for your future. All buyers have a different mortgage style with varying needs and goals. For some, it is important to know the precise amount of their payment be each month, and a fixed rate is best. For others, the key is taking advantage of the lowest possible rates at any given time, so they might be best off with an adjustable or variable rate mortgage. And these are just two examples of the many choices out there. An experienced broker will help you navigate the different mortgage options available to homebuyers today.
Today’s stable rates mean greater competition among lenders for your business. Why not take advantage of this flexibility by being fully informed about your choices? When you sit down with a bank, they only discuss their rates and their mortgage products. When you consult with a broker, you will be working with a trained professional who has access to a variety of different products from many lenders. They work independently and focus on meeting your needs, not those of a large bank. A mortgage broker will not only find you the best Calgary mortgage rates, but they will also tailor your mortgage to help you reach your goals.
When you buy a home, you aren’t just looking for the best rate available today. You need to think about what your needs might be for the next five, ten, or twenty years. You need the expertise of an independent broker who will keep you informed about Calgary’s mortgage interest rate trends and help you plan for your financial future. To learn more about how a mortgage broker can help get the best rates and terms necessary to meet your goals, please contact us today!