The latest retail rate forecasts published by Desjardins show possible mortgage rates of up to 8.95%, for a term of five years, by the second quarter of 2023.
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The vice-president and chief economist of Desjardins Group, Jimmy Jean, also expects interest rates to rise once more this year.
“It is certain that at the moment, we are already around 5.5%. We expect the Bank of Canada to make another rate hike in October, so we still have to anticipate the possibility that by the end of the year, it will increase a little more in terms of interest rates,” he said in an interview with TVA Nouvelles.
Quebecers would not necessarily pay these rates, warns Mr. Jean, however.
“The rates we’re looking at here aren’t post-discount rates, they’re posted rates. So, in general, the rates that people actually pay tend to be lower than that,” he explains.
Forecasts, however, show that interest rates might start falling once more following reaching such a high.
“I still think that in 2023 we will start to have some respite, for example in terms of mortgage rates, because at that time, we should see the financial markets start to position themselves for not only the fact rates are going to plateau, but at some point, if growth slows, we’re going to have to expect the Bank of Canada to start cutting rates once more, albeit cautiously,” says Jimmy Jeans.
