Despite a disordered mortgage scenario where rates rise up unpredictably economists say that consumers' monthly payments are still safe without any risk that it would also rise very soon.
According to CBC News, CIBC deputy chief economist Benamin Tal thinks that mortgage rates will stay relatively stable, saying, "I just don't see anything that will send them up."
Many homeowners were worried as interest rates continued to rise over the last few months. In a volatile economy that is threatened by declining value of oil and low Loonie, a drop in mortgage cost, especially fixed rates, is normally anticipated. Surprisingly, banks announced in December that mortgage rates were going up.
According to CBC News, CIBC raised its three-year fixed rate to 2.59 per cent. Then RBC also raised the offer on a five-year fixed mortgage to 3.04 per cent. TD Banks also followed the movement by raising its one-year and four-year closed special rates 0.10 point each while Scotiabank raised its variable rate by 10 basis points.
Since rates are expected to go up, eventually, a real-estate professor John Andrew from Queen's University in Kingston said that it will be safer for new homeowners or those renewing their mortgages to go for a fixed, or locked in, rate with regular monthly payments that aren't tied to the principal. He said, "I'm a little gun-shy about variable-rate mortgages, just because you're in a period where mortgage rates are so low and there isn't a widespread expectation in the market that they're going to rise dramatically."
He added, "I'm a big one for certainty, and I think the big uncertainty is rising rates. We know they're going to rise - we just don't know when and we don't know by how much. So do you want to get into a variable situation where you've got no control over that?"
