We have been spoiled rotten with the rock bottom low interest rates that we have had for the past 15 or so years. I am reminded of this fact now that the five year discounted rate is 5.14%. However this sill pales in comparison to high rates of the mid 80’s at 16 or 17%.
People keep asking me when do I see rates coming back down. Well if you listen to the central bankers like Tif Macklem who is the head of the Bank of Canada, it’s going to keep going up before it comes back down. This is because our overall inflation rate is till too high. With the last monthly report from August which had us at 7%. Yes it is coming back down from it’s record high this summer, it’s just not coming back to earth fast enough.
All this means that we will have to suffer out with higher interest rates until the inflation rate comes back down. So the sooner we can reduce our spending, the less action the Bank of Canada will have to take to force us to tighten our belts. Buckle up, it may be a bumpy ride for the next 6-12 months.
Today I am thankful for a trip to the valley with my wife and daughters yesterday to celebrate their birthday, having them home during their reading week from university and the perspective that things are not as out of control as they were in the 80’s.
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here