What Affects Variable and Fixed Canadian Mortgage Rates?
July 1st, 2009 by manny-ppc2The absolute chaos in the global financial markets over the past few weeks with the US $700 billion bailout plan, Lehman Brothers going bust, European banks being nationalized and some government’s guaranteeing customer deposits is starting to hit home as mortgage rates have recently increased– which leads to the very interesting question – what actually affects Canadian mortgage rates?
There are so many factors that influence the economy and ultimately lenders and the amount they charge on home loans, including unemployment, inflation, consumer confidence and the oil price to name a few that it can be extremely difficult to keep all these metrics straight in your head. Many people believe that the Bank of Canada’s monthly interest rate decisions directly affects all mortgage rates, but that’s not the case. Variable (ARM or adjustable mortgage rates) and fixed mortgage rates in Canada are actually influenced by different factors.