Why do economists make interest rate predictions to the nearest tenth of a percent? To prove they have a sense of humour of course.
As the New York Times says, economists are paid to guess wrong. In July 2007, for example, 13 of 13 major Canadian bond dealers predicted interest rates would increase in late 2007. One month later 11 of 13 said rates would remain unchanged! A month or so after, economists were actually calling for the BoC to lower rates!
In short, you might as well flip a coin than rely on an “expert’s” opinion of rate direction.
But if no one knows where rates are going, how do you know whether to get a fixed or variable mortgage?
Well, try asking that question of your mortgage planner. The best professional mortgage planners will analyze your financial profile and risk tolerance, apply the available research, and then suggest the best course of action irrespective of rate direction.
We may not know where rates will be 12 months out, but there’s a few tricks of the trade we can still employ to save you interest.
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