A televised interview with Bank of Canada Governor Stephen Poloz may have set homeowners and future buyers into a mild state of panic, according to a report filed by The Globe and Mail and focused on possibility of increasing long-term fixed rates.
Currently homeowners are enjoying stability knowing that they will pay a fixed amount on their home purchases over the next five years. There has been no significant increase in rates since the 2008 economic crisis, either. Poloz’s statement was based on the U.S. Federal Reserve’s lowing of its bond from $85 billion to $10. This could cause an increase in interest rates here in Canada, which would in turn create higher mortgage rates.
Still, some industry players say there is no reason to panic. Peter Veselinovich, vice-president of banking and mortgage operations with Investors’ Group in Winnipeg, dismissed the “sky is falling” scenarios, and explained that any increase over the long term will be moderate and take a lengthy period of time.
Ostensibly, that slower pace would give homeowners time to adjust.
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