OECD hawkish on Bank of Canada rate hikes
The Bank of Canada should resume raising interest rates this autumn to help cool the country's hot housing market and allow the bank to reach its inflation target.
A report released on Tuesday from the Organization for Economic Cooperation and Development (OECD) states that Canadians should expect a policy rate increase in autumn of 2012. This article from the Ottawa Citizen explores how this will affect mortgage rates.
Although this is earlier than expected, the increases are forecasted to be gradual, and monetary policy is not expected to tighten until the first quarter of 2013. The OECD warns that in some markets, home prices have become overvalued, and a gradual increase in rates and slight changes to lending regulations are believed to correct this trend.
The OECD also released their forecast for economic growth of 2.2% in 2012 and 2.6% in 2013, stating the Canadian economy appears to be recovering after a slow period.
To learn more about how these changes affect you, talk to an Ottawa Mortgage Broker.
To read the full article from the Ottawa Citizen, click here.