Will Low Mortgage Rates Continue through 2021?

Will Low Mortgage Rates Continue through 2021?

We’re currently experiencing historically low mortgage rates. And that has resulted in flocks of homebuyers taking advantage of these remarkably low rates over the last twelve months. However, there’s no guarantee rates will remain this low much longer.
 


And while there is no perfect way to predict what the future will bring, it is important to consider the other big picture economic indicators. When looking ahead, we should consider that Canada’s economy recorded its largest-ever annual GDP drop of 5.1% last year. Yet surprisingly it is on track to make a comeback by spring. This comeback could force the Bank of Canada’s hand to rein in inflation sooner than anticipated.

Derek Holt Scotiabank Economist notes that these realities could carry

“strong policy implications for the Bank of Canada that is increasingly looking as if it over-committed itself to keeping rates on hold until 2023.”

Some say the federal government’s discussion of up to $100 billion in new stimulus spending over the next three years could contribute to over-stimulating demand.

All of this translates into the potential for the need to raise interest rates earlier than the 2023 timeframe that has been repeated in messaging from the Bank of Canada in recent months.

 

What does this mean for buyers?

Low mortgage rates are creating an outstanding opportunity for current homebuyers to get more for their money while staying within their budget. As the economy gets stronger and we recover from the challenges of 2020, it’s natural for rates to potentially rise in response to a healthier economy.

With low rates fueling activity among hopeful buyers, there are a lot of people who are highly motivated and looking for homes to purchase right now. In this environment, it can be challenging to find a home to buy, so a local real estate agent will be key to your success if you’re thinking of buying too. Working with a trusted real estate professional to navigate the process while rates are in your favor might be the best move you can make.
 

Bottom Line

If you’re ready to buy a home, it may be wise to make your move before mortgage rates begin to rise. Let’s connect to discuss how today’s low rates can create more opportunities for you this year.  Call me at 416-575-1212.  

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