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Canada’s recently-announced trade deal with the United States and Mexico is about to make housing more expensive, and mortgage-holders should brace for impact.
James Laird, president of CanWise Financial and co-founder of mortgage comparison site , told HuffPost Canada that now that there’s some clarity on free trade with Canada’s biggest trading partner, “this big cloud of uncertainty on the Canadian economy has been lifted.”
“If a trade deal had not happened, it would’ve put significant downward pressure on our economy,” Laird said.
“And so for this reason, the Bank of Canada was hesitant to raise rates any further until we had a super-important free trade agreement in place.”
Laird said that now the deal is in place, the new focus for the Bank of Canada will be inflation, which has grown above the BoC’s target levels in recent months.
“Which is why, now that we have a trade agreement in place, it seems like a certainty that we will have a Bank of Canada rate increase at the end of October, probably followed by, let’s say two to three in 2019.”
While rising interest rates can often cause house prices to fall, they’re not the only thing that affects purchase prices.
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