Ketiz Singh

How Trump’s Trade Wars Could Impact Your Mortgage Rates

Hey there, my fellow Indian readers! Today, we’re diving into the world of Trump’s trade wars and how they could potentially affect your mortgage rates. It may sound a bit complex, but don’t worry, I’m here to break it down for you in simple terms.

The Trump Tariff Concept

So, what exactly are these tariffs and how do they work? Well, think of it as a trade war between countries. The idea is that by imposing tariffs on goods coming in from other countries, the US aims to boost its own production and create more jobs. Basically, it’s like putting a tax on imported goods.

Now, Trump has been talking a lot about implementing tariffs, but the exact details are still up in the air. He’s been delaying the decision, moving the deadline from inauguration day to February 1st. So, we’re all left wondering when and how much these tariffs will actually be.

Impact on Mortgage Rates

Now, let’s get to the important part – how these tariffs could affect your mortgage rates. If there were no tariffs, variable rates would continue to drop. In fact, next week, the Bank of Canada is expected to lower its lending rate, leading to lower variable rate mortgages.

Currently, commercial bank prime is 5.45%, with variable rates around 1% to 1.2% lower. After the rate drop next week, we could see variable rates as low as 3.95% to 4.3%. So, if you’re looking to buy a house, now might be a good time to consider a variable rate mortgage.

On the other hand, fixed rates are currently around 4.09% to 4.59% for a five-year term. But here’s some exciting news – Butler Mortgage is offering a special rate of 3.79% for high ratio purchases. That’s a steal!

The Impact of Tariffs on Mortgage Rates

However, if Trump goes through with tariffs on Canadian goods, it could spell disaster for the Canadian economy. The estimates are grim, with the economy shrinking by 2.9% to 3.5% and 100,000 jobs at risk. In this scenario, the Bank of Canada would likely lower rates to boost the economy, leading to even lower variable rates.

But here’s the twist – fixed rates could actually go up due to inflation fears. If Canada retaliates with counter tariffs on American goods, inflation could rise, causing fixed rates to increase. So, in this chaotic scenario, it’s hard to predict how mortgage rates will be impacted.

Conclusion

So, there you have it – a glimpse into how Trump’s trade wars could influence your mortgage rates. While the future is uncertain, one thing is clear – keeping an eye on these developments could help you make informed decisions when it comes to buying a house. Stay informed, stay prepared, and remember, the world of finance is always full of surprises!