Won’t get fooled again. Banks cut fixed mortgage rates

targetLast week I heard on the radio that the employment numbers for September weren’t nearly as hot as September itself was. The economic stimulus, hasn’t lead to new job creation.

What’s bad news to the employment market is good news to those of us who want to borrow money. We all know that money and employment at closely related, (exactly like you think and also) when unemployment goes up, interest rates come down.

As a result of our ongoing economic sluggishness, last week most of Canada’s major banks cut their fixed mortgage rates.

You may recall that fixed-mortgage rates are strongly tied to the bond market. The bond market borrowing rates have also quietly been falling. Keep your eyes on bonds to see where fixed mortgage rates will go.

I was one of the many people who locked in (part of) my mortgage in the spring. I got spooked by all the newspaper talk about rates going up. Rates did go up, but now the prediction for the medium term is, that we are going to see low fixed-rates and minimal movement on variable rates.

What does this mean to you? It means that it’s still a good time to buy and sell homes and condos in Kitchener Waterloo. Why take the risk and wait till spring when rates will probably go up? If rates go up homebuyers won’t qualify for the mortgages they need to buy the same house or condo that they can buy today.

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