Hints Of Rising Interest Rates - Floating Rate VS Fixed Rate Mortgages

Hints Of Rising Interest rates

Is now the best time to lock in your mortgage? Before jumping in with both feet one should look at, and compare, the effect an increase will have on your comfort level or your ability to pay. Locking in now will ensure your rate for a given period of time but it will be higher than your current floating rate resulting in an immediate increase in your mortgage payments.

While mortgage rates are at historicaly low levels two TD economists feel that Mortgage rates may soon rise if the real estate market does not cool off. August home sales were up more than 18% across Canada over last year and avergae home prices continued to rise. Continued surging home sales and rising prices may force the Bank to rethink its pledge to keep its interest rates at .025% till mid 2010. Should this happen we may soon see interest rates rise.

National Post ---The possibility exists that the Bank of Canada may have to break its conditional pledge on interest rates should the housing market continue its red-hot performance, economists at Toronto-Dominion Bank said Tuesday.

Read Paul Vieira's full article "Hot housing market could trigger rate hikes: TD" in the National Post (October 6, 2009).

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