TD raises prime rate!
Yesterday, as I am sure many of Canadian readers are aware.... The TD Bank raised their prime lending rate by 15 basis points. Are the rest of the Canadian Banks sure to follow? This increase is not a significant amount but is this the start of a trend. With the new mortgage rules prescribed by the Ministry of Finance on the Canadian regulated lenders it was predicted that raise in mortgage rates would occur although the economic conditions both inside and outside of Canada would favour a reduction in that rate. These new regulations will likely hand cuff borrowers to their existing lender making it easier for them to increase lending rates. It is expected that this will definitely decrease the rate of price increases but is it putting the brakes are too hard. Will it cause prices to fall? Only time will tell. If you are looking you may not want to defer a decision any longer.
I think the economy is beginning to show some cracks and this is the leading edge of what it to come. Will prices drop? I am sure in the short term, but a lack of inventory is still pressing housing prices higher (especially in the mid to higher end housing markets). It's all about the when, not if ...again. Hope you're well Mark...