I'm on Peter Kinch's mailing list because you never know when you'll need a top quality mortgage broker and you can never get enough insight into mortgage interest rates.
Here is a recent mailout:
In case you missed it the following is a copy of the interview between Peter Kinch and Russell Byth that aired Sunday, November 1st on News 1130
Russ:
There's been a lot of talk recently about Canada's economic recovery and a key component of that recovery has been record low interest rates. So, does an economic recovery spell the end of low rates for homeowners?
On the line with me is best selling author, Peter Kinch with Dominion Lending Centres. Pete, what are your thoughts?
Peter:
Well Russ, there's no question that the Bank of Canada used 'Emergency Rates' to kick start the economy and once again we've seen that the housing market was at the heart of that recovery.
Russ:
So once the Central Bank feels the recovery is in full swing, will they start to raise rates?
Peter:
Technically yes - in fact, the Central Bank's main mandate is to keep inflation at about the 2% level. If inflation is below 2% they keep rates low to stimulate the economy and if it's above 2% they raise rates to cool it off.
Russ:
But in spite of signs that we are in a full recovery, inflation is still below 2%.
Peter:
That's right and mainly thanks to the strength of the Canadian dollar. In fact, the Bank of Canada is quite concerned that if the Loonie continues to gain on the US Greenback it could dampen Canada's recovery, which will serve to keep inflation below the 2% mark, thus resulting in the Central Bank continuing to keep the Prime rate low for now.
But in the meantime Russ, remember that the long term rates are governed by the bond markets and they are starting to factor in a recovery - so we will likely see a slight rise in the long term rates over that same period.
Russ:
Thanks Pete, something to keep an eye on. In the business centre, I'm Russell Byth.
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