, the Nation’s Most Trusted Private Mortgage Brokerage, Weighs in on What “Normal” Rate Hikes Could Look Like When Economy Recovers

Toronto, Canada (PRWEB), November 19, 2013 –, the leading low-cost private mortgage solution provider in Canada, is releasing its expert opinion on what it thinks “normal” rate hikes could look like when the economy recovers and how this will impact home buyers.

To help combat a weak Canadian economic environment, the Bank of Canada has kept its overnight lending rate at one percent since September 2012. It is thought that the Bank of Canada will not raise the lending rate to “neutral” until the economy improves, which some economists take to mean an inflation target of two percent and an economy running at its full capacity. That said, there are no precise factors the Bank of Canada needs to see before adjusting its rates up or even further down.

“Due to economic headwinds, it’s quite possible that the Bank of Canada will not raise its key lending rate until the end of 2015. That said, the Canadian economy is doing better than most, so what the Bank of Canada will raise its rate to is open for debate,” says Bob Aggarwal, president of “Because of ongoing global challenges, it’s entirely possible that a new so-called ‘normal’ prime rate, the basis for which variable rates are based on, could average just 4.25%. That’s a significant departure from the five-percent level most economists consider to be normal, and markedly lower than the 30-year average of 6.89%.”

Whether it’s compared to five percent or 6.89%, a variable rate of 4.25% would translate into significant savings for homeowners. This makes shorter term variable rate mortgages a more attractive option for some.

“Even though our economy is healthier than that of most developed countries, it’s important to remember that the Bank of Canada’s low overnight lending is reflective, in part, of a weak global economy,” Aggarwal adds. “In a climate where tepid economic growth and contained inflation is the new norm, interest rates could stay below normal, even after a recovery.”

What kind of mortgages should potential home buyers consider in this economic climate? According to Aggarwal, it depends on a number of factors, including finances, employment, and the timeline. Some potential homeowners might be better off considering a variable mortgage, while others might find a five-year or even three-year fixed mortgage more compelling.

“Because everyone has different needs, there is no one-size-fits-all approach, whether it’s for first-time home buyers or those looking for a second or even third mortgage,” Aggarwal concludes. “While the big banks only consider their own financial products, the independent licensed agents at draw from hundreds of banks and lenders to help their clients find the mortgage that best suits both their financial and lifestyle needs.” is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent licensed professionals helping Canadians coast-to-coast. provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and financing concerns. To learn more about, visit the web site at .

Bob Aggarwal

Mr. Aggarwal was one of the original founders of, one of the largest volume Mortgage Brokerage houses in Canada. Mr. Aggarwal has over 12 years of experience in Brokerage and Lending in the small and medium business sector, as well as experience and expertise in the residential housing market. Since the inception of, Mr. Aggarwal has been instrumental in developing the operating platforms, and policies and procedures which have guided the organization to date.


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