Mortgage rates currently remain at historically low rates, however, they are expected to increase in the last quarter of the year and will continue to increase into 2015. It is sitting at 3.14% (for a one-year term) and is forecasted to stay stable in this upcoming quarter. As per the BCREA, the mortgage rate forecast is as follows:
*Data is average of weekly rates. Source: Bank of Canada.
In response to bond yields seeing a downwards trend, lenders have offered historically low mortgage rates, which is great news for homebuyers.
In relation to Canada's economy, its weak start was quickly overturned by strong economic growth in the second quarter with a 3.1% real GDP increase. This growth was largely attributed to the number of exports. It is expected that the economic growth will remain relatively strong.
Interest Rate Forecast
The current labor market is still seeing high unemployment rates and unstable employment growth. The BCREA expects that the Bank of Canada will "continue to take a cautious approach to monetary policy until it sees concrete signs that the economy is growing sustainably above trend". It is predicted that the Bank will lower interest rates however, a tighening of interest rates are forecasted for the second half of 2015.