after Christmas - before New Years

Santa has come and gone - and we did in fact receive a gift of lower interest rates from Santa - as the 5 year mortgage rates drifted down to 3.79% range...while the variable rate was prime less .20-.25 (2.00%) - the spread being approximately 1.75%
the government of canada bonds have adjusted to provide a profit spread in the range of 1.3% which is at the lower end of most lenders spectrum -thus we can possibly expect a spike upwards in the rates - to approximately 3.99% in the new year if the spread holds.
Make no mistake -the bank of canada has warned consumers rates will increase in the new year - likely around June - i would expect the variable rates to increase by .50% and likely by a full 1% by the end of 2010 - the fixed rates will likely increase to 4.75%...(just my guess...) which means variable rates will be at 3% and fixed will be at 4.75% - THEN 2011 - i expect rates on the variable side to increase another 1% to 4%.....if you can lock in 5 years below 4%...now is the time to act...i may be wrong - but over 30 years of experience tells me rates will not stay low forever and when they move - they will move quickly.
back to the greygoose and olives...see you in the new year.