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The Canadian mortgage market has been experiencing a very turbulent time since March of 2022. The interest rates have seen overnight increases from The Bank of Canada. Let us roll over back to 2020 in order to understand today’s situation better. The COVID 19 pandemic forced countries to enforce lockdowns and this resulted in massive economic crashes across the globe.

The Canadian government decided to tackle this situation by decreasing the interest rates to a record low. This initially paid dividends as people flocked to the real estate market and demand soared. This massive demand for real estate eventually caught up with the availability and started causing shortages. With interest rates this low, the demand never slowed down causing the property rates to rise steeply. This started the inflation wave in Canada and now to control this situation, the government started spiking the interest rates to slow down the market. The bond yields took a dive over 30 basis points on Friday and now the fixed mortgage rates fell to 2.84%, which were 3.15% a day earlier. Market analysts see this as the early signs of the inevitable recession.

Effects on Fixed Mortgage Rates

Well this is still early to make any predictions but still experts believe that the fixed mortgage rates might experience a further dip in near future. Still inflation can not be so simply dealt with a single financial instrument as it has more complexities to it.

Effects on Variable Mortgage Rates

Variable mortgage rates do not seem to be slowing down anytime soon with The Bank of Canada set to increase overnight rates again at its next meeting. Based on recent calculations the average monthly mortgage payment has increased by more than $1100 over the past 10 months.

What should you do?

We understand this is a very technical set of information’s to dump on anyone in a pinch. These are quite turbulent times and we would strongly suggest consulting an expert on the matter. A mortgage broker with good knowledge can successfully guide you through this. As they have the industry insider information, they are always in a much better position to make decisions for you.

Mr. Pankaj Aggarwal from Mortgage Alliance is an industry stalwart with years of experience and sound knowledge. He has guided his innumerable clients to financial safety and a beautiful home, which they can call theirs.

You can make your dream of buying a home come true with Mortgage Alliance , even in the current chaotic economic circumstances. We are here to help you, book a free consultation now!

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