HBM See’s Interest Rate Hike Unlikely Due to Low Inflation
With interest rates falling in Canada last month, most economists are in agreement that we will not be seeing interest rates rising in the near future.
Ontario, Canada - June 26th, 2012 With interest rates falling in Canada last month, most economists are in agreement that we will not be seeing interest rates rising in the near future. With gas prices falling last month, Canada saw it’s inflation rate dip to 1.2% in May, the lowest it has been in nearly 2 years. That is a 0.8% drop in inflation since April, but according to economists the drop was actually much larger with the consumer price index being at its lowest level in over 2 years. This is good news for anyone looking to lock in a home mortgage.
Although there has been much speculation that the Bank of Canada may raise its lending rate in order to ease household debt, many critics feel this move could prove negative for an economy that is showing only modest signs of growth. Also, with Europe’s financial woes showing no signs of easing up and the United States economy starting to falter, most economists agree, this is not the time to be raising the key interest rate. Rates are expected to remain steady through 2012.
There’s has also been speculation that the inflation for May was a bit of an anomaly, since it’s being compared to inflation from last May, where gas prices unexpectedly rose. Even with that comparison, the inflation rate was still only 1.8% with the gas price element being taken out of the equation.
Other factors that also favor a stable and low interest rate for the foreseeable future includes week retail sales for the past couple months and so the most we can possibly expect by the end of the year is a rise in interest rates by a quarter of a percentage point; Although, this move is looking less likely as the year progresses.
All of this means good news for consumers looking to buy into the market at these record low interest rates. With home mortgage rates at all time lows, now has never been a better time to lock in the best rates this generation has seen.
Home Base Mortgages is a leading Toronto mortgage broker, which specializes in all types of mortgages ranging from home equity loans, second mortgages, private mortgages, mortgage refinancing, home mortgages and hard money lending.
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