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The Futue For Interest Rates


The Future For Interest Rates

The first 5 months for 2009 have been an interesting time for the real estate and mortgage market. House prices have seemed to stabilize; fixed interest rates and the bank prime rate are at their lowest levels ever. So what does the remainder of 2009 have in store for the real estate and mortgage markets? Below are our predictions.

Per our last rate prediction newsletter in January 2009, we still believe that the western market (particularly Alberta) will continue to be fundamentally strong. With a stronger than average job market despite the current economic times, the real estate market should continue to show strength throughout the year. Also as predicted in January housing prices have started to stabilize. In addition, due to the lowest interest rate environment ever seen, more buyers are looking to enter the market particularity in the last two months.

Fixed rates: Fixed rates have recently stabilized with the best 5 year fixed rate for pre-approvals and 120 day rate holds currently at 3.79%. The lowest possible interest rate for a 5 year fixed closed mortgage is 3.74% but must close within 30 days. Since our last prediction at the beginning of the year rates have come down more than expected. We still feel that for the remainder of the year; rates will stay close to their current levels (within 0.25%) with a steady increase projected to start in mid 2010. Current fixed interest rates are at levels never seen before. The real estate market for the remainder of 2009 should continue to increase as more buyers take advantage of the unbelievable interest rate environment.

To view our current rate sheet please click the following link:

Variable rates: On April 22, 2009 the prime lending rate was lowered to 2.25%, which was a decrease of 0.25% from the previous level. The Bank of Canada rate of 0.25% is at its lowest rate ever. This means another decrease in the Bank of Canada rate is not possible. Therefore the banks prime rate will not go any lower than the 2.25%. The Bank of Canada did state that their plan is to keep the bank rate of 0.25% and prime rate at 2.25% for 1 year with no increases, unless there is a major change in the economy. Currently the best variable mortgage pricing is prime plus 0.40% (2.65%), however most lenders have adopted a pricing of prime plus 0.60% (2.85%). With the prime rate having nowhere to go but up, we still predict the prime rate to increase rapidly in mid 2010 to control inflation.

To view our current rate sheet please click the following link:

The remainder of 2009 should be an excellent year for you to get the mortgage you deserve. Whether you choose to go with a fixed or variable mortgage, 2009 is shaping up to be an optimal time to purchase a new, second, rental or vacation property, renew your existing mortgage or refinance your current property.

Please contact Betty at 403-532-3927, e-mail, Kevin at 403-589-3021, or at our website: and apply today.

Also please tell anyone you know that may be looking to purchase, refinance or early renew their mortgage as it may give you an opportunity to receive a $1,000 gift certificate of your choice. Click Here or open the attachment to find out further details.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Summer of 2009.