According to John Bordignon, Executive VP of Strategic Development with MERIX, there isn’t a lot of changes expected in mortgage rates in the near future. While the economy is recovering, it isn’t recovering as fast as initially expected.

In order for the economy to continue to recover, a number of factors need to improve, including :

• A decrease in unemployment rates and job-loss statistics
• A stabilization in oil prices
• The TSX is still fairly volatile, and needs to stabilize
• Stabilization of oil and other commodities at a price that will stimulate the economy
• Overall world economic stabilization

However signs of stability in Canada’s economy are evident in the bond and rate markets:

• Bond yields have improved over the last month
• The yields and spreads are now within the “comfort zone” of 1.8 to 2.0%.  The banks are comfortable with the spreads and will likely not change rates unless the spreads rise above 2.0%.
• Variable rate mortgages are settling in at between Prime +35 and +45

For all intents and purposes, we are on the road to recovery, how quickly we will actually get there and what the long-term consequences for the last 8-10 months will be is yet to be known.