Mortgage rates creeping up, a sign of things to come

If you’ve been listening to the news then you know that posted mortgage rates at some of Canada’s biggest banks have edged up .35 %, you can read about it HERE AT CTV. To put it in more tangible terms that equates to about a 7% increase in carrying costs as compared to current rates.

Our fragile economic recovery hinges on the ability of consumers to take on debt, and with rates climbing that means more money going to interest payments and less circulating in the general economy. In layman’s terms….this ain’t good.

Where do you think housing prices will be next summer in a climate of increased taxation (hello HST) and higher mortgage payments? The U.S. economy started its slide as many American homeowners woke up to find themselves owing more on their homes than they were worth. The technical term is negative equity…more common language used by underwater property owners is “holy sheet, we’re screwed“.  Read More…

This article has 6 Comments

  1. Leon S

    An increase of 7% in carrying costs is actually not that unusual. We experienced the same thing 10 years ago. So hold your horses and not panic just yet.

  2. Dominick Moore

    The government might have to step in to freeze rates if trends continue. I’ve seen some reports and there are signs of these rate hikes slowing down.

  3. Kenzie B

    Rent is never good if you can own (at least for 4 years).

  4. Reese H

    And this is why i rent

  5. Myron B.

    Your assessment is correct in that the growing mortgage rates are outpacing increases in consumer income which means a potential slow down in house shopping is just around the corner. I doubt it will spell a potential mortgage crisis like the US but it is still disturbing.

  6. Garry C

    HST for the most part won’t mean higher taxation. It is only for certain types of goods — mostly luxury items.

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