TORONTO, Aug 5, 2010… RateSupermarket.ca, Canada’s rate comparison website for personal finance products such as mortgages, insurance, credit cards and GICs has announced the results of their Mortgage Rate Outlook Panel for August 2010.
Canadians should expect lower fixed mortgage rates as lenders respond to dropping bond yields, while variable mortgage rates should increase following the Bank of Canada’s rate announcement at the beginning of September.
Fixed mortgage rates: Down
The majority of our panel members believe fixed mortgage rates will decrease in August, and during the first few days of the month we have already seen this happening. As mortgage lenders react to lower bond yields, their continued strong demand for residential mortgages is increasing competition for mortgage customers.
Dr. Ian Lee, Director of MBA Program at Carleton University summarizes this scenario well: “There is an excess of mortgage funds and lenders chasing a decreasing number of mortgage borrowers”. This increased competition is likely to be good news for mortgage shoppers resulting in price cutting and lower fixed mortgage rates.
Variable mortgage rates: Up
Expect variable mortgage rates to remain level in August, but to increase at the beginning of September following the next Bank of Canada rate announcement. The Central Bank’s most recent Monetary Policy Report indicates that an increase in the Bank’s trend-setting overnight lending rate in September is likely.
Despite the weak US job numbers and soaring unemployment in most of Europe, the Bank predicts a gradual reduction in monetary stimulus in Canada. With only three Bank of Canada meetings remaining till the end of the year, it is likely that the September announcement will push interest rates up.
To read all the detailed commentary from our panel members, please visit our Mortgage Rate Outlook Panel.
About the Mortgage Rate Outlook Panel
The panel includes some of the country’s top mortgage experts, and helps Canadian consumers make informed decisions by offering a short-term outlook for fixed and variable mortgage rates.
This month’s panel members:
About RateSupermarket.ca (www.ratesupermarket.ca)
RateSupermarket.ca is an independent, impartial resource that is not affiliated with any mortgage lender or broker. It is the only resource in Canada that allows visitors to compare the whole mortgage market in the country. RateSupermarket.ca also compares insurance products, credit cards and gic rates.
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