Welcome to Mortgage Rundown, a quick take on Canada’s home financing landscape from mortgage strategist Robert McLister.
But there are two exceptions. Below, I’ll dive into each.Even the Bank of Canada’s crack forecasters can’t foretell inflation with a high degree of long-term accuracy. “And it’s the largest such team, the best trained, has every shred of data that’s available,” former Bank of Canada governor Stephen Poloz told me in an interview earlier this year.
OK, so here’s a brilliant economist – the man who used to steer interest rates for the entire country – telling us to take even the Bank of Canada’s rate forecasts with a giant rock of salt. Consider that the next time you devise your own analytical methods while trying to pick a mortgage term. For that reason, a jump in bond yields can help when assessing rate risk over the near term. Soaring yields, as we’ve seen lately, warn fixed-rate mortgage shoppers to secure a rate hold with a lender if they haven’t already.
But financial decisions are about probabilities. Sustained material changes in bond yields are one of the better forecasters of changes in fixed mortgage rates over the near term. The problem is, the forecast window is so short, that this is of little value in helping you pick a mortgage term. That’s an oversimplification, but the point is that rate-cycle turning points are eventually guaranteed when the Bank of Canada raises or lowers rates significantly. What we don’t know is when that roller-coaster will peak and when it will bottom out.
History shows that the probabilities shift even more in variable’s favour when the prime rate is meaningfully above its five-year average, as it is today. What is meaningful? Certainly more than one standard deviation above the five-year average. And, ideally, you want to see the prime rate topping out for more than one Bank of Canada meeting, as well as confirmation from leading indicators that inflation is heading in the right direction.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Chasing mortgage predictions: More parlour trick than science?Welcome to Mortgage Rundown, a quick take on Canada’s home financing landscape from mortgage strategist Robert McLister.
Lire la suite »
Alleged mortgage fraud victims still not off the hook for payments after criminal charges laidWith former mortgage broker and real estate agent Po Yuk 'Peggy' Chan facing criminal charges stemming from a mortgage fraud investigation, her alleged victims are still liable for paying hundreds of thousands of dollars in fraudulent mortgages and are turning to the civil courts for relief.
Lire la suite »
Homeowners brace for mortgage payment shock amid higher-for-longer rate outlookTORONTO, Australia — From ultra-low interest rates that led to a huge spike in real estate demand to the speed with which interest rates shot up to levels not seen in a generation, it’s been hard to keep up with the shifting landscape for mortgage ho
Lire la suite »
Homeowners brace for mortgage payment shock amid higher-for-longer rate outlookTORONTO, Australia — From ultra-low interest rates that led to a huge spike in real estate demand to the speed with which interest rates shot up to levels not seen in a generation, it’s been hard to keep up with the shifting landscape for mortgage holders. Now, with interest rates increasingly expected to stay higher for longer, many of the homeowners who locked in low rates years ago are likely bracing themselves for financial pain as their mortgage comes up for renewal. “Each month that passes
Lire la suite »
Homeowners brace for mortgage payment shock amid higher-for-longer rate outlookFrom ultra-low interest rates that led to a huge spike in real estate demand to the speed with which interest rates shot up to levels not seen in a generation, it’s been hard to keep up with the shifting landscape for mortgage holders.
Lire la suite »
Homeowners brace for mortgage payment shock amid higher-for-longer rate outlookTORONTO, Australia — From ultra\u002Dlow interest rates that led to a huge spike in real estate demand to the speed with which interest rates shot up to levels not…
Lire la suite »