Friday, July 25th14.4°C
22663

BMO says fixed interest rates may be the better deal amid possible rate hike

TORONTO - It may be time for homeowners to start thinking about locking into long-term mortgages.

Although variable mortgages have historically proven more cost effective than five-year fixed rates, a new study by the Bank of Montreal (TSX:BMO) suggests the tide may be turning.

BMO chief economist Douglas Porter and senior economist Benjamin Reitzes say the bond market has loudly warned over the past year that the era of low interest rates may finally be drawing to a close.

Porter and Reitzes say that as bond yields rise they will put pressure on borrowing costs and long-term mortgages.

They add that mortgage rate hikes would have the greatest effect on those who are already financially stretched and it is those homeowners who would benefit most by locking in as a hedge against significant rate increases.

Currently, a five-year fixed mortgage rate from one of the big Canadian banks hovers over three per cent, with variable rates ranging below that.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15394.45+0.07
S&P CDNX1011.65-0.58
DJIA17083.80-2.83
Nasdaq4472.107-1.59
S&P 5001987.98+0.97
CDN Dollar0.9292-0.0015
Gold1297.50-7.00
Oil104.30-0.29
Lumber326.00+0.20
Natural Gas3.851+0.004

 
Okanagan Companies
Pacific Safety0.200.00
Knighthawk0.01-0.005
QHR Technologies Inc1.17+0.02
Cantex0.08+0.02
Anavex Life Sciences0.28-0.045
Metalex Ventures0.08+0.01
Russel Metals35.57-0.08
Copper Mountain Mining2.82+0.06
Colorado Resources0.205-0.01
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.19+0.01

 



22704

FEATURED Property
19394944401 Westside Road
$499,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22097