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2020 Home Mortgage Interest Rate Forecast | Marimark Mortgage

The past few months have been a rollercoaster ride for real estate as well as the mortgage industry.Covid-19 has impacted the Canadian economy, just like it has affected other economies across the world. 

The Canadian government took swift steps to launch emergency relief measures to protect the country from the blow that many households and businesses were going to face.

However, most of these measures are now approaching an epilogue. For instance, the Canada Emergency Response Benefit (CERB) was extended for another two months in July 2020 and is now coming to an end for most Canadians.

Similarly, the Canada Emergency Wage Subsidy (CEWS) for business was available only till the end of December 2020

Economic Outlook And New Regulations

In the recent press release the Bank Of Canada made an announcement that the overnight rate was being maintained at the effective lower bound of 0.25%.

Economists and the analysts in the financial clique are in agreement that the interest rates in Canada will continue to remain low in the anticipated future, in order to smooth economic recovery and vitalize investment.

Though, when it comes to the mortgage industry, Canada Mortgage and Housing Corporation (CMHC) implemented a tightening of mortgage rules in Q3.

Real Estate Market Outlook

According to the recent report by CMHC, this means that sales and home prices would not recover to pre-Covide levels until 2022

CMHC further stressed that the timing and comprehensiveness of improvement will vary from region to region. For instance, Toronto, Montreal, and Ottawa are expected to recover sooner than other regions in Canada. 

While the CMHC predictions may seem windswept, many real estate organisations are assertive that the bounce back will happen soon.

Mortgage Rates Are Extraordinarily Low

There have been remarkable developments in the mortgage industry.

We noticed that now lenders are providing exceptionally low rates. HSBC Canada, for example, was offering a 5-year fixed default mortgage for 1.99%. It is expected that the other lenders are also following the same suit.

The lower interest rates which are currently in trend are expected to encourage all the potential homebuyers to apply for a mortgage as well as homeowners to look into refinancing options.

What are your thoughts on where the real estate market is headed? We would love to know your thoughts.

Get in touch with us to stay up to date of the always changing mortgage industry.

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