RateSupermarket.ca’s Expert Mortgage Panel Divided but Consensus Expects Rates to Remain Low in Early 2010

The Panel of financial gurus provide their Outlook for January – mortgage rates will stay put as we kick off 2010

TORONTO, January 07, 2010… RateSupermarket.ca, Canada’s go-to website for first time home buyers and current home owners looking to compare the best mortgage rates, has announced the results of their Mortgage Rate Outlook Panel for January 2010. 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.

“There is no shortage of information when you are looking for a mortgage; but consumers often just end up more confused then when they started.” said Kelvin Mangaroo, founder of RateSupermarket.ca. “Our Panel of financial gurus provide Canadian consumers with insider insights into this turbulent mortgage market – will rates go up, down or stay the same over the next 30-45 days.”

This month’s mortgage rate outlook indicates that mortgage shoppers still have some time before rates resume to their normal, historical levels. Both fixed and variable mortgage rates are expected to remain unchanged for January 2010.

Official RateSupermarket.ca Mortgage Rate Panel Outlook January 2010 : UNCHANGED

To view detailed commentary from our panel members, please visit the Mortgage Rate Outlook Panel page.

Fixed rates: Unchanged

Although 40% of our panel members think fixed rates will begin to creep up this month, there is a stronger argument that they will remain unchanged in the short term. There is uncertainty about whether or not recent fluctuations in bond yields will result in increased fixed rates. With some lenders still hungry for business, and banks likely to maintain caution, expect fixed rates to stay as they are for the time being.

Variable rates: Unchanged

80% of our panel members agree that variable mortgage rates will remain unchanged in the short term. Government talks about increased household debt and possible intervention by increasing down payments and reducing the maximum amortization period indicate that interest rates are unlikely to increase when the BoC meets again on January 19th. Banks are also expected to kick off the New Year by making a grab for market share by discounting their rates off prime.

In contradiction to the overall outlook, Gregory Klump, Chief Economist of the Canadian Real Estate Association believes fixed rates could increase this month. “Bond yields have crept higher over the past month, but mortgage rates have not. Yields may rise further if job growth last December comes in stronger than expected. If yields rise further, expect fixed mortgage rates to bump up slightly.”

“The past couple of months have witnessed very volatile 5 year bond yields.” says George Hugh, Vice President of Treasury for ING Direct, who

agrees with Mr. Klump. “All of a sudden, we’re headed for higher rates and the possibility of inflationary concern is back in the mix.”

On the other end of the spectrum, Garth Turner, author and financial commentator, believes 5 year fixed mortgage rates could drop 20 basis points over the next two months. A surge in the housing market due to the introduction of HST in Ontario and BC in July, the possible increase in down payments and the evitable BoC rate hike, would be the main drivers for this.

About the Mortgage Rate Outlook Panel

Panel members:

 

  • Dan Eisner, MBA. AMP. President, Verico True North Mortgage
  • George Hugh, Vice President, Treasury, ING DIRECT
  • Gregory Klump, Chief Economist, Canadian Real Estate Association (CREA)
  • Dr. Ian Lee, Director of MBA Program, Sprott School of Business, Carleton University
  • Garth Turner, Noted Canadian Author, Columnist, Speaker and Financial Commentator, Former MP

 

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 life insurance products and credit cards.

Related Topics

Mortgage News / Mortgage Rate Outlook Panel / Mortgages

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