Newsletter July 2018 – Part I

• July 10, 2018

Welcome to the Guardian Financing July 2018 monthly newsletter. This month’s issue is about the rate forecast from July, 2018.

Get Ready For New Mortgage Rate in July – Bank of Canada

The rates may have not changed for this month, but the Bank of Canada has given indications that they may go north come July. During the May meeting, the bank observed that inflation stayed close to its two percent target, though this was likely to go up in the few coming months.

The bank also observed that with the recent US outlook, as well as the uncertainties surrounding NAFTA negotiations, and the stresses in the emerging markets, there was every indication that the rates would be adjusted upwards from the month of July.

The statement released by the bank about the impending rate hikes has been viewed by experts as more hawkish than what the market anticipated and it was in complete contrast with some of the observations made a few weeks ago. There is a general feeling in the market that there will be two more hikes this year, with BMO predicting that the first would be in July and the second one in August.

The rate hold through to July is, however, viewed as a temporary reprieve for those who currently have adjustable-rate mortgages, considering that their monthly payments had already increased by between $35 for every $100,000 of mortgage they hold ever since the rates started rising last year.

For those intending to opt for bad credit mortgage loans, however, the variable rates will still be applicable following the big banks’ variable rate wars that has been raging for the past eight weeks. Though the fixed mortgage rates have been rising steadily over the past year, there are hopes that for fixed-rate shoppers, there may be a slight pull back on the rates, which would then give them some reprieve when making their purchases.

Other factors have also complicated Canada’s interest-rate outlook since Poloz’s last announcement on May 30. That said, as a result of strong GDP growth, along with the stabilization of real estate and manufacturing segments and other factors, a rate hike has become increasingly likely.

Guardian Financing is a direct private mortgage lender. We serve the greater Montreal area providing short term residential mortgage loans, typically ranging from $50,000 to $750,000. Contact us today to discuss your file at 514-700-3121 or by email at files@guardianfinancing.ca