The author is a Vancouver mortgage broker who has extensive experience in bad credit mortgage applications.
Currently, BC interest rates seem to be second to the Canucks and their playoff drive. However the traffic to my site indicates that BC home owners are concerned where interest rates are going.
The main stream media is speculating that the Bank of Canada must raise mortgage rates in the coming months. I would like to offer another opinion.
The worlds economies are split between those that are overheated…India, China, Malaysia and the countries severely impacted by the economic slow down…US, European Union and Canada (to a lesser degree). The issue in my mind is that the stronger economies om the east primarily served the consumption of the western economies. While India and China have a developing middle class, they have larger problems such as powering their industry. A case in point was the move of a popsicle manufacturer from China to Thunder Bay Ontario due to the lack of reliable power. Maintaining their economic growth will be problematic when you consider the impact of lowered consumption in the western economies .
Until the economies of the west begin to improve where there is significant job growth, the central banks will keep rates down. The raising of rates in these economies will have a disastrous effect. The US job numbers, our major trading partner, reveal that the worst is not over for the United States. The Canadian finance minister’s statements of concern over the impact on the Canadian economy is an indication any significant interest rate rise, which would put the brakes on any recovery, is off the table for the next 6 months.
