Mortgage Calculator2018-10-03T14:16:55+00:00

How Will The New US – Canada Trade Agreement Affect Interest Rates?

While I will not comment on whether the new trade agreement reached this week between Canada and the US is a good deal for Canada, or a bad deal, I do think that simply having a deal is positive. Not having a trade agreement between the US and Canada, two of the largest trading partners in the world, would have certainly been detrimental to the Canadian economy, so it’s positive to see a result from these negotiations.

I would like to comment a little on what it means for interest rates in Canada.  After the new trade agreement was announced on Monday, some experts saw this as a green light for the Bank of Canada to continue increasing rates at its next rate announcement meeting on October 24th. Government bond yields spiked on the news of the new agreement in anticipation of a possible rate increase by the BOC later this month. With a new trade deal in the works (Still not final yet) it certainly eliminates some uncertainty for the Canadian economy, but there are many other factors to consider when making any further rate changes.

The bottom line is that the increase in bond yields could cause a rise in mortgage rates, as fixed mortgage rates closely follow government bond yields. If you have any clients that are in the market for a new home, I would suggest that they review their mortgage pre-approval and consider extending their pre-approval to hold interest rates as long as possible before we see any changes in rates. Also, anyone that already has an upcoming purchase should consider locking something in as soon as they can.

Here are a couple of really great offers we have available this week

5 year variable rate @ Prime – 1.05% (2.65%)
5 year fixed rate @ 3.29%

**Information provided by:
Jamie Small, AMP              613-591-3591 x108
The Mortgage Advisors

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