What We Can Expect From Mortgage Rates In 2022
Some great information from Easy123 Mortgage on their predictions for mortgage rates in 2022!
Why Mortgage Rates Increased In 2021
At the start of 2021, we saw the lowest 5 year fixed rate in history at 1.39%. At the time, it was predicted that rates would be a bit higher by the end of the year. They were wrong. They aren’t a bit higher....They are a lot higher.
So, what happened?
Many people were so frustrated with the pandemic that they started to develop a ‘life goes on’ attitude....we can’t live in a bubble forever! And hibernating at home for two years is not living. People are getting out and spending money, which is driving our economy forward…and bringing mortgage rates with it.
We made it until early October when the lowest 5 year fixed rate for an insured mortgage was as low as 1.59%, slightly higher than where the year started. Fixed mortgage rates then started increasing and increasing fast.
Fortunately, mortgage rates have since stabilized.
The Omicron COVID variant creates uncertainty moving forward, which has contributed to ending the upward trend for fixed mortgage rates. The Bank Of Canada is still planning on increasing their rate at some point in the middle two quarters of 2022, however Omicron might force them to push it out later than originally expected.
It comes down to how the pandemic unfolds.
With any luck, this will be COVID-19’s last kick, which would finally put this thing behind us.
That would then mean that mortgage rates can be expected to increase further.
5 year fixed mortgage rates are currently as low as 2.19% – 2.59%, or variable as low as 0.90% (prime -1.55%) to 1.35% (prime -1.10%), depending on your situation. Should 2022 be the year that the pandemic final fizzles out, then we would expect mortgage rates to be higher at the end of the year.
Rising mortgage rates can be concerning for those with mortgages coming up for renewal, or for those looking to purchase. We do our best to keep you posted on what can be expected with mortgage rates moving forward, but all we can do is speculate. Anything can happen.
For those with mortgages coming up for renewal in 2022, you’ll be able to lock in a rate up to 120 days prior to your maturity date, so we would recommend reaching out to your Lender at this time to find out your options.
Regardless of what happens, 2022 will be another interesting year. Hopefully we won’t see the mortgage rate roller coaster we saw in 2020, or the large upward swings we saw in 2021. A little bit of stability in rates would be nice, but that might be no more than wishful thinking. Time will tell and anything can happen.