In a widely anticipated move earlier this week, the Bank of Canada left its overnight lending rate at the current level of 1%. As the economy continues its gradual recovery and economic indicators begin to solidify across the country it appears that experts are somewhat split in their forecasts for when the inevitable rate increases will occur.
The Financial Post recently reported that in a survey of 12 banks that deal directly with the Bank of Canada, three predicted the first interest rate hike will occur in July while six others forecast a September increase. So given the survey respone, 75% of the big banks anticipate a rate hike within the next 4 months.
So what does it all mean? The overwhelming consensus from the big banks and financial experts across the country is that the end of historically low interest rates is coming; the million dollar question is when? I personally do not possess the powers of Carnac to pick the exact date, but following along the lines of the banking survey, I strongly believe you can bet on some sort of increase before the calendar turns to 2012.
If you are currently looking for a new home or plan to start your search in the next three months it certainly wouldn’t hurt to pay your mortgage broker or specialist a visit and lock in a rate now. You may not find your new home within the locked-in period but it will provide you with a modicum of security if the rates do actually head north earlier than widely expected this July.