Friday, January 14, 2011
Canadian Interest Rates What Direction?
We have been seeing a lot of reports, predictions, economists papers on what is going to happen to rates in 2011. The real answer, no one really knows.That is the gift of making predictions we can be wrong and right at the same time. We have had a decade of low interest rates and over two years of the lowest historic rates on record. This means there is only one direction and that is up. We are not going to see large rate increases as some have been hoping for(doomsday believers). We should see prime rise by.50-.75% over the next year and the fixed rate increase by the same amount. This will not affect buying habits of people or stop jobs from being created. We are in a new era of debt load and management.The older generation needs to understand that we are not going to be able to buy homes in Vancouver for $12,000 and watch it go to $1,500,000 over 35 years. This means we need low interest rates and good debt management for toady's home buyers.