Continued low interest rates will offset weakening global economic growth in 2012 and will help Canada’s economy to avoid recession, according to a CIBC World Markets report. In 2012, the global economy is expected to grow by just 3 per cent, while Canada‘s growth should reach 2 per cent, keeping the unemployment rate stable, but the economy will be mostly dependent on low interest rates. The report said that Canadian house prices will remain steady until mortgage rates eventually increase beyond historically low levels.
“Further out, the most likely scenario is that eventual increases in rates will lead to a modest decline in prices, in the magnitude of 10-15 per cent,” said CIBC deputy chief economist Benjamin Tal.
You can find a map of interest rates around the globe here.
“Variable mortgage rates will stay at current levels well into 2012,” says a panel of five mortgage industry and academic experts surveyed by RateSupermarket.ca. Fixed mortgage rates should stay low or drop further over the next 30-45 days, as there is lower demand for home loans during the Christmas holidays. However, from comparing last week’s data, we can observe a slight growth in the lowest closed variable mortgage rate and no change in fixed rates.