Canadian Mortgage Market Trend Predictions for 2016

Canadian Mortgage Market Trend Predictions for 2016 - Infographic

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Securing home loans in Toronto depends heavily on the Canadian mortgage market. People who are interested in purchasing a house, especially those with bad credit or no credit who might be diving into the home buying experience for the first time, need to be aware of the shape of the market and the options available to them. Here are some trends that will be hitting the mortgage market in 2016.

Fallout from a Rate Hike

The Canadian Federal Reserve ended 2015 with a rate hike that many economists think was long overdue. That rate hike has both good and bad implications. On the bright side, it means that banks are more likely to give out new loans, since they expect a better rate of return. On the other hand, it means that interest rates are slightly higher than they were just a year earlier, which will scare some new buyers off. Those with a lack of credit shouldn’t despair – there are several banks that give out bad credit mortgages in Toronto, and these loans will be more in line with the current market rate than they normally would have been. If you can prove you are a good investment, banks will give you a loan.

Matching the US Market – For a Little While

At the moment, both the Canadian and the US markets are fairly close in synch, which means that it’s about as easy to get a bad credit mortgage in Toronto as it is on the other side of the border. However, that synch up is unlikely to last due to the fact that the North American economies are beginning to deviate. In the United States, there are multiple rate hikes expected in the 2016 calendar year. By comparison, Canada isn’t expected to see as many hikes, leaving the market relatively unfriendly to buyers in the short term but much friendlier in the long term. As 2016 moves on, you will see the Canadian market become friendlier to homebuyers than they would be in the United States.

Inflation Matters

If you’re wondering about the long-term credit options available in the Toronto area and the rest of Canada in 2016, keep an eye on inflation rates. The way the market is currently configured, it is likely that inflation will drive rates up or down going forward. If you’re looking for poor credit loans in Toronto and want to figure out their long-term viability, keep an eye on commodities with prices that tend to fluctuate often, such as oil. If you wait until inflation starts trending downward, the odds are good that you’ll be able to pick up a better deal on your loan.

While there are likely to be many changes in store for the 2016 calendar year, the Canadian mortgage market looks like it will be friendlier than its United States counterpart as time goes on. The more attention you pay to the trends above, the better your chances of securing a loan will be and the happier you will be as you settle into your new home.

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