Low Variable Mortgage Rates to Continue for the First Half of 2011

RateSupermarket.ca’s panel of experts are calling for level interest rates in January and beyond

TORONTO, January 10, 2011… RateSupermarket.ca, Canada’s go-to website for comparing mortgage rates, has announced the results from their Mortgage Rate Outlook Panel for January 2011.

Despite Canada’s economic recovery, the experts believe our growth is hindered by the slow-moving US and Global markets, which means that interest rate increases are likely to be delayed as we wait for the rest of the world to play catch-up.

Fixed mortgage rates: Unchanged

The decreased demand for mortgages and relatively stable bond yields, leads our panel of experts to believe that fixed mortgage rates will remain unchanged for the month of January. However, this outlook is susceptible to change with additional defaults in Europe or poor results on upcoming US economic indicators.

Also, ultra low interest rates for the past few years have fueled a borrowing frenzy creating concern about mounting debt levels for Canadian consumers. It wouldn’t be a surprise if the government made a policy change to address the debt problem by adjusting the mortgage rules, likely spurring a change in fixed rates as well.

Variable mortgage rates: Unchanged

Our panel members believe the Bank of Canada will hold off on increasing interest rates during the first half of 2011. This means variable mortgage rates will also remain at low levels during this time and then gradually increase from there. As the Canadian economy continues to recover, the sluggish progress in the US and the frailty of the EU, tasks the Central Bank with maintaining a tricky balancing act.

“Governor Carney and his people will be trying to thread the needle on interest rates trying to balance the rising loonie against low interest rates that encourage further consumer indebtedness”, says Dr Ian Lee, Director of MBA Program, Sprott School of Business, Carleton University.

To read all the detailed commentary from our panel members, please visit: 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:

  • Dan Eisner, MBA. AMP. President, Verico True North Mortgage
  • Dr. Ian Lee, Director of MBA Program, Sprott School of Business, Carleton University
  • Elisseos Iriotakis, President, SAFEBRIDGE Financial
  • George Hugh, Vice President, Treasury, ING DIRECT
  • Rob McLister, Editor, CanadianMortgageTrends.com

About RateSupermarket.ca (www.ratesupermarket.ca)

RateSupermarket.ca is the largest independent and impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy to use comparison engine provides much needed transparency to the Canadian financial market and allows visitors to quickly find the best rates. Over 1M Canadians have turned to RateSupermarket.ca to save money on their mortgage, insurance, credit cards and GICs.

Related Topics

Mortgage News / Mortgage Rate Outlook Panel / Mortgages

Leave a Reply