Economists at the BC Real Estate Association predict mortgage rates will “dip slightly” in the first half of 2008 before rising “modestly” in the 2nd half.
They also say “a rate cut in January is not a done deal” due to potential inflation dangers.
Furthermore, they note that anecdotal evidence now “suggests that some lenders are offering smaller discounts off posted mortgage rates to their clients.” That’s not surprising since subprime concerns continue to keep mortgage rate spreads higher than normal.
(Partial Source: BCREA December Mortgage Update)
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Last modified: April 26, 2014
I have a question, with the higher spreads, who is making more money?
Hi FT,
It’s mostly the investors financing these mortgages that are benefiting from the higher spreads. There is zero benefit to mortgage planners. Wide spreads probably hurt us more than anything else.
Cheers,
Rob
Hi Rob, so when you say investors, do you mean the banks?
Yesir. Big mortgage financiers include banks, which require the same risk-based returns as non-bank investors. Everyone wants to be compensated for the perceived “risk” of home lending these days. These spreads wont last forever though.