Last Friday the world reeled at the result of Britain’s historic vote to leave the European Union. As results hit the web, shockwaves were felt throughout the global economy including Canada. While what happens in the UK may not seem like something that could affect your mortgage, the truth is a little more complex.
With Brexit causing many major economies including ours to suffer losses, Canada’s already struggling economy is projected to stall even longer than previously expected and even cause the GDP to decline between 0.5% and 1% or more in the second half of 2016 depending on how badly Britain’s split affects our oil exports, a Business News Network report says.
After a hard loss last year resulting in a slight recession, Canada’s economy is a fragile one and while low interest rates have been implemented to take some financial pressure off of Canadians, it has also contributed to the nation falling into more collective debt than ever before.
Mortgage rates have remained at their lowest levels ever, igniting what has been the hottest housing markets we’ve seen in Vancouver and Toronto. Amid fears of a potential housing bubble signs were finally beginning to point towards gradually rising rates and a cooling off of the market next year. With Brexit keeping mortgage rates low for the foreseeable future, debt levels may not improve as much as they would’ve otherwise.
If you’re still looking for a mortgage or renewal time is coming up in the next year or so, this could be good for you as lower interest rates will save you lots of money. That being said, you should take advantage of these low rates to get rid of your debt more aggressively or else you run the risk of simply holding onto more debt for a longer period of time.