How long will low interest rates on mortgages in Canada will last: expert opinion

During the pandemic, it is the low mortgage rates that have become one of the main reasons for the rapid growth in demand for real estate in Canada. Knowing that this program is not going to last forever, many local and foreign investors began to buy housing and commercial properties. To date, the exact expiration date of the reduced interest rate is not known. However, experts believe that the conditions for obtaining a mortgage will not change any time soon, as this may negatively affect the economic situation in the country.

When is the interest rate expected to rise?

Mortgage lending specialists in Canada are confident that the rate hike should be expected no earlier than the end of 2022. Earlier it was reported that these conditions will last until 2023, but in April the Bank of Canada announced that the period was planned to be shortened, since the economic goals of the state would be achieved earlier than expected.

The experts' current forecasts:

• at the end of 2022, the percentage will be increased from 0.25% to 0.50%;
• at the beginning of 2023, there will be another increase to 0.75%.

A gradual increase in the interest rate is necessary in order to test the stability of the economy. In addition, the state does not want to drastically reduce activity in the real estate market.

At the same time it is worth noting that many investors who buy expensive housing on mortgage in Canada are ready to make such a deal even at higher interest rates. Such data were the result of a social survey in various regions of the country.