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25 Jun

Mortgage Rates Rising as fast as the Calgary Flood!

General

Posted by: Leonore Claypool

Okay it’s a bad joke I admit. I can’t imagine having to be evacuated from my home because of flooding. Especially with two dogs and a retired horse.  I have to say though that four rate increases in the last week or so is stressful. It affects how much mortgage you qualify for and the monthly cash flow which for young families tends to be tight as it is. Remember that historically speaking the 5 yr fixed rate is still very low and still fantastic even at 3.49% – what some lenders are now offering.  As you start rate shopping rememer BEWARE of the product terms and conditions.  Mortgages ARE NOT created equal. That’s like saying I want a dog no bigger than 12 inches – well there’s many breeds that fall into that category!

And why are rates going up so fast anyway? Well the big investors are dumping bonds and their current low yields with the intent of buying them again when yields are higher. They were frightened by Beranke’s comment that the US Federal Reserve would stop buying bonds – hence the dumping of bonds and “free falling”.  At the same time the stock market and gold markets are being sold.  Nasty all at the same time. That’s a lot of selling at the same time.

Oh how these big guys play with our lives. Most of us just want to pay off our homes as fast as possible without worry and still live a good life.