The Future of Canada’s Mortgage Rates

This past year has been full of uncertainty when it comes to the housing market. We’ve experienced two waves of this pandemic and watched the Canadian economy come to a halt. As a Markham mortgage-holder or future buyer, this may leave you wondering what this means for future rates as you watch the economy’s conditions. 

Based on Canada’s current economic status and the coronavirus pandemic conditions, here are the projections of future mortgage rates in Canada.

Canadian Economy in Recession

Due to the first lockdown, which only started easing mid-July around Markham and our surrounding Greater Toronto Area, we saw the economy slow to a crawl. The forced closure of non-essential businesses, including restaurants, clubs, shops, salons, and more in Ontario and across Canada meant less money circulating this past year. The closure led to thousands of lay-offs and some permanent business closures, leaving many vacant storefronts and properties in the area. 

While the government initiated some programs to help business owners during this crisis, we remain in a recession that will likely last until the second or future waves of the virus end. 

Low Mortgage Rates Expected for Years

The pandemic has caused far worse unemployment rates than the 2008 recession, at over 13%. While the above programs offer some financial assistance, buyers and mortgage owners need affordable rates during this economic climate. For that reason, the Bank of Canada plans to keep mortgage rates as low as possible to help you afford your current or future mortgage payments. 

The plan is to keep fixed rates within the lower bound at 0.25% for up to 5 years. That way, mortgage payments will be more affordable for residents who have been impacted by the pandemic either through unemployment or making fewer profits. Years of these low rates will ensure the real estate market continues to thrive as we endure this current crisis and recovery. 

Includes Variable Rates

This low rate applies to variable rates (interest rates that can increase and decrease over your mortgage payments). For the near future, as long as fixed rates stay low until the economy recovers, variable rates will also remain stable and low. This means that for a while, with the fixed-rate staying at 0.25% and its associated variable rates fairly consistent, you will know what your mortgage payments will look like, making it easier to budget them so you can afford your mortgage. 

Buy Now With Little Risk

If you’ve been considering investing in Markham real estate, now would be a good time to do so. These low fixed and variable rates will make your mortgage payments easier and more affordable for the next years to come. 

For more information about the future of the Canadian real estate market, let Markham real estate agent Martin MacFarlane be your guide. He will help you make the right decision according to the market’s current conditions and what you need and can afford. Contact him now to get started.