The world is changing. The United Kingdom (commonly known as UK or Britain), just left the European Union. For those who don’t know, the European Union is a conglomeration of European countries bringing them under the same umbrella, with a common currency, and cutting down on many cross country migration laws. #Brexit has been trending on every social platform. The European Union includes most European countries, of which the Great Britain Republic (GBR) is no longer a part of. The UKs parliament voted out of the European Union just recently and this caused a global stir.
The reason provided by the British was that the immigrants were too high due to this and this suppressed their native population. Some might think that this is comical for a country, who almost occupied the whole world with their conquering, but it has happened, and this article will give you an insight into what Brexit can do to Canada and its mortgage industries and the entire world as well. While most other countries voted to remain in the EU, the British exited, causing furore across the world.
What it Means, the Exit?
The exit is bound to bring about many different things as UK was one of the major and most important countries in the EU. Here are few points that can show the effect that Brexit will have on this world.
- This can cause a breakup of the entire UK, followed or preceded by the entire EU.
- Brexit will be followed by referendums and repudiations by different countries which might result in the entire break down of the union.
- Financial turn of events, with drop in value of both Euro and the Pound Sterling.
- The I, me, myself sort of ideology is on the rise, marking Brexit as the first of its kind.
The Canadian Mortgage Rates
The Canadian Mortgage rates will also see a changeover with this exit.
- Fixed Rate Mortgages:
Fixed rate mortgages are the short term mortgages, which are predicted to not fluctuate much. If you happen to own a lot of British Pounds, then you are in for a period of volatile ownership, while others, not much. Even if there is precipitously large fall, lenders will not bring about any immediate cuts. Knee jerking reactions is not something that lenders want to do.
- Variable Mortgage Rates:
The Canadian and the US monetary policy links are very closely related and thus, investors should be careful about the direction of US Federal Reserve’s moves and calculate their risks accordingly as Canada’s market moves in a straight line with the US monetary policies.
While the basics of the mortgage systems seems to be firmly placed on the ground, Brexit will not bring about any major changes in the short-term mortgages, but it can be predicted that in the longer run, Brexit will have major impacts, which can be seen only with time. Heightened financial risk is eminent and it should and will be a cause for concern at a later stage.