In their December 2018 Mortgage Rate Forecast the B.C. Real Estate Association is predicting that the Bank of Canada may only increase interest rates by ¼% in 2019. The report also predicts that five year fixed mortgage rates may also be at or near their top.

In making their predictions the BCREA pointed to the slowing economies in both Canada and the US as well as the impact of lower prices for Canadian oil. They are not alone in saying that the economies in both Canada and the US will slow next year. More and more analysts are predicting that both economies will slow which will reduce the pressure for the central banks to increase rates.

If you would like to get a copy of the full forecast you can email me at lawrie.thom@mtgarc.ca.

How does this impact you if you are looking to take out a new mortgage or if your mortgage is up for renewal in 2019? Depending on your personal situation and your ability to deal with an increase in your monthly mortgage payment you may want to consider taking a variable rate mortgage.

Right now the spread between the variable and five year fixed rates is about ¾%. So if rates go up by the predicted ¼% you would still be saving ½% on your interest payments. For a typical $300,000 that would be a savings of about $32,000 over the life of you mortgage with monthly payments that are lower by around $100.

If you would like some help deciding if a variable rate mortgage is right for you give me a call at 604-961-2400.

Or if you would like to get a copy of the full forecast you can email me at lawrie.thom@mtgarc.ca.