Mortgage Market Commentary - June 23, 2015
Given the close ties between the Canadian and American economies it is little wonder market watchers were paying very close attention to the latest musings from the U.S. Federal Reserve. It is also little wonder that what they heard created quite a flutter, even though nothing actually happened.
Fed chair Janet Yellen has given the clearest signal yet that interest rates will be going up and the clearest projection is that it will happen in September … probably … maybe … depends. It could be December or even next March. From the U.S. perspective employment growth is a key concern.
For Canadian mortgage holders when is not critical. How much and how many – "the entire path of rates", as Yellen put it – are what matter. On that point Yellen says the Fed is projecting increases of 100 basis points a year until rates normalize (likely in 25 bps increments).
Canadians contemplating long-term mortgages need to be aware that the U.S. increases, whenever they start, will likely move across the border.
Mortgage Payment Factor remains ~$455/month per $100K borrowed for a 5 year fixed, 25 year AM mortgage.
Market Rates as of June 23, 2015
