A panel of five Canadian mortgage experts has predicted unchanging variable and fixed rates for June, despite the number of home buyers now rushing to take advantage of a growing number of five-year fixed rates below 2.99 per cent.
The panel’s overall consensus was that banks and brokers alike will continue to offer discounted fixed rates so as to remain competitive.
However, panelist Ron Butler, a 35-year veteran mortgage broker at Verico Butler Mortgage, diverted from the group’s consensus, pointing to RBC’s suggestion that bond yields could end 50 basis points below its official 2014 forecast.
“Taking this into account,” he told RateSupermarket.ca, “I believe we may see a slight downward movement in five-year fixed rates in June.”
Meanwhile, panelists agreed that the progress made by Canada’s inflation rate hitting the 2 per cent benchmark imposed by the Bank of Canada isn’t enough to justify an increase to the country’s cost of borrowing. So, the group also expects variable rate mortgages to remain unchanged for June.
“The recent bump in the inflation rate is due to the weakening of our dollar, which raises the costs for most of the goods we import from the rest of the world,” panelist Will Dunning, chief economist for the Canadian Association of Accredited Mortgage Professionals, explained to RateSupermarket.ca.
“The Bank of Canada is likely to view this as a temporary event that does not justify any change in the base interest rates that it controls.”