There are times when going with what you wish for rather than listening to the professionals will pay off. This is one of those times for Canadians looking at financing a home.
In less than a year, mortgage rates in this country have dropped nearly one full percentage point. Last fall, they were eight-tenths of a point higher than the 2.6-per-cent rate readily available for a five-year fixed term mortgage today.
That has all kinds of implications. It gives governments a break if they’re spending more than they take in as debt service costs are falling. It is also easier to buy a house which has led to some strengthening in the hotter real estate markets such as Toronto and Vancouver.
But the market is calling for even more interest rate reductions, something the Bank of Canada will not be able to shrug off, even though they and others such as the Minister of Finance have been cautioning us against borrowing more because we could get caught in the vice of higher rates. Those who chose to ignore those warnings now appear to be catching a break.