Canadian Mortgage Rates May Incline in 2013

Online, June 18, 2013 (Newswire.com) - Canadian property values have increased constantly over the past several years and will continue to increase in the future as well, which means buying property will be financially more challenging in the upcoming days. However, this predicament can be easily solved by borrowing mortgages from banks and lending institutions. Mortgages have always been very beneficial for those who do not have the potential to buy residential property.

By borrowing mortgage from a bank, one can easily buy the property of his choice and reimburse the debt later with ease. But as we all know, borrowing loans and mortgages are not free and we have to pay a certain amount of interest to the lender. The cheaper the mortgage rate, the more convenient it will be for the borrower to pay it back and the higher the mortgage rate the more difficult it becomes to reimburse the debt.

Experts are presuming that buying property in the coming months of 2013 will not only be difficult because of high property prices but also because of rising property mortgage rates. This is because demands for properties despite price hike have increased significantly in Canada and many have applied for property mortgages in the past few years. High demand for property mortgages is the primary reason that will drive lenders to make them expensive by increasing the interest rates.

With increasing property values and soaring mortgages rates, buying property will be literally impossible especially for first-time buyers. It is estimated that around 30 percent of the Canadians are without homes and have the will to buy property at some moment in the future. An increase in mortgage rates will be highly devastating and a big part of the existing population will become incapable for buying property. Considering that, buying property will be impossible for a large number of people because of expensive mortgages, sales will undoubtedly fall.

A fall in sales can be responsible for causing housing market depression in Canada by the end of 2013, which will ultimately lead to price fall. Experts believe that increase in mortgage rates can certainly bring a downturn in the Canadian housing market, which has shown growth for the past several years. Canadian housing market flourished during the time of great depression when US housing market was completely under recession. However, with increasing prices and mortgage rates the Canadian housing bubble may burst at any point in the future which will ultimately lead to lowering of property values.