In global terms, Canadians are actually paying higher-than-normal mortgage rates, only exceeded by a small number of developed nations like the United States and Australia.
A new analysis by HuffPost Canada has shown that even with fixed-rate terms going for as low as 2.39% in Canada at present, these historic lows are still considerably above a majority of advanced European economies.
To compare, the United Kingdom has fixed-rate mortgages with rates as low as 1.65%, and France at 1.39%. Finland has 0.96%, while Germany has 0.5%.
Among the lowest in the world are the fixed-rate products offered by Japan (0.37%), Belgium (0.1%), and Denmark (-0.5%).
Canada’s rates are in no way deterring consumer activity, though. Last June, the nation’s household mortgage credit grew by 5.2% month-over-month – its fastest pace in two years, according to Scotiabank data.
The same month also saw the outstanding balance of Canadian mortgage debt grow by 3.7% annually, up to $1.57 trillion total.
Earlier this month, Royal Bank of Canada president and CEO Dave McKay warned that economies and organizations should not underestimate the effects of “rising geopolitical risks and trade tensions.”
“This uncertainty is manifesting itself in downward trends in global interest rates,” McKay said in an analyst conference call, as quoted by the Financial Post.
Fortunately, Canada itself is well-equipped to weather the worst of the impacts, despite fixed rates being much higher than the global standard.
“While there are risks to the outlook, current economic conditions in our core North American geographies remain solid, with unemployment near multi-decade lows and a continued resilience in the Canadian manufacturing sector.”