There’s a lot of conversation again about where interest rates could be headed and I thought it made sense to write out my thoughts.
The Bank of Canada is watching higher gas and energy prices and what they could mean for inflation.
Does that mean rates are definitely going up? No. But it’s another reminder of something I’ve learned over many years in this business; we cannot time the market.
Let’s first clarify:
Fixed rates are influenced by the bond market, and we have seen the fixed rates increase recently.
Variable rates move with lenders prime rate which are influenced by the Bank of Canada’s policy rate.
The variable mortgage term is what fluctuates, meaning your mortgage payment may increase or decrease, it either stays the same if the Bank of Canada “holds” rates or it increases/decreases according to the Bank of Canada policy announcements, ( 8 times a year).
When it comes to the markets and our economy, there is always going to be uncertainty, seems there will always be political/global tension, there will always be headlines that look positive or negative as to what might happen next.
I’ve personally witnessed MANY markets and what I can say is this, we never know today, what is going to happen tomorrow.
It is almost that simple, there are as many economists that will predict an increase as there are predicting a decrease. The optimists and the pessimists.
I’ve been helping people for over 25 years manage their largest financial decisions, and one thing I’ve learned is that these decisions are largely emotional.
What I mean is, what feels right for you may be completely different from what feels right for somebody else.
Some people are perfectly comfortable with a variable rate and some movement in their payment. Others sleep much better knowing exactly what their payment will be every month, they want predictability.
Neither is wrong, it’s a question of which option feels right for you? Not your parents, your colleagues or your friends, YOU.
Let’s look at your whole financial picture, understand your personal goals and comfort level and decide from there.
Let’s face it, your mortgage is going to be around for a long time. Let’s make the best decision we can with the information we have today.
I understand that everyone wants to feel like they have made the right decision when it comes to their finances, I feel the same way about my finances.
My goal is to offer the best solution for you, while saving you time & money.
I wrote this quickly, there could be mistakes at least it’s not AI! 🙂
Trusted Advice. Better Decisions. More Freedom.
