The Fed has confirmed its intention to increase its key rate for the second time this year to 1.25%. This monetary tightening demonstrates that most economic experts in the United States share the economic synthesis that confidence in the economic and financial system in general has returned despite a mixed start to the year and the extremely cautious management of the President of The Fed, Mrs Janet Yellen, of which she considered this beginning of the year of temporary and cyclical situation.

From a market point of view, this rate hike will help alleviate uncertainties in the financial markets over the past few months and will have to increase bond rates and fixed-rate portfolio returns.

This rate increase could lead the Canadian central bank to follow suit in order to synchronize the macroeconomic parameters between the two countries given the strong dependence of the Canadian economy vis-à-vis the US economy and elsewhere Adjusted to the rate of growth of the Canadian economy, which had been struggling to recover from the last oil shock, but whose last indications would seem much more optimistic to envisage probably a small increase in rates in order to control and anticipate the course The rate of inflation among other things.

A possible increase in the central bank's key rate of 0.25% or 25 pdb would certainly increase the prime rate by the same amount, which is currently at 2.70% to 2.85%, depending on the bank, which will Of the variable rate mortgage rate of the same increase. The mortgage holders will keep their discount rates negotiated with their mortgage lender through their mortgage broker and will continue to benefit from key rates as they have never been so low in recent years.

Some economists believe that the fair borrowing rate should be in the range of 3% or more; However, given the rates currently posted and negotiated in the mortgage market, the reality is that mortgage holders currently will continue to enjoy relatively favorable borrowing costs despite recent government restrictions on access Credit at a rate of 4.64% for any purchase with a down payment of less than 20% of the purchase price regardless of the term selected, to which is added one Mandatory mortgage credit insurance against default, paid by CMHC, Genworth or Canada Guaranty insurance companies.

In conclusion, mortgage rates will continue in the short to medium term, at least on a downward curve, although small cyclical increases may occur from time to time and remain in the shadow of the stimulus of the Canadian economy focused primarily on The export policy.