First-time home buyers warned of possible mortgage hikes.
BMO predicts mortgage rate hikes in second half of 2014.
According to BMO’s First-Time Home Buyer’s Report, one-third of first-time buyers (31 per cent) expect interest rates to stay the same over the next five years. However, these first-time buyers may need to reconsider their outlook.
BMO Economics projects the Bank of Canada will raise its overnight lending rate in the second half of 2014.
"The Bank of Canada has made no changes to its policy bias," said Doug Porter, Chief Economist, BMO Capital Markets. "With Canadians’ debt-to-income ratio poised to stabilize in the months ahead and the housing sector cooling, we continue to look for a rate hike during the second half of 2014. Even so, other interest rates, such as longer-term mortgage rates, can rise well ahead of the Bank of Canada."