A few quick comments on the recent movement of five-year fixed interest rates. (Heading towards 3.19% currently)
If you’re in a variable rate mortgage you are not directly affected by what is happening currently. Variable rate mortgages follow the bank of Canada’s prime lending rate. Prime remains at 3% as it has since September of 2010. The next scheduled bank of Canada meeting is July 17 and there is no change expected. In fact there is no change to Prime expected by many for well over a year. Continue to enjoy that variable rate discounted mortgage. If you are contemplating walking into a fixed rate product please consult with me first as there are many other considerations and implications than simply securing a rate.
The five-year fixed rates are moving due to the fact that they are dictated by what happens with the bond market. The bond market has showed some signs of life over the past couple of weeks. There will be much ink spilled during the next week or so over whether or not this is the end of the sub 3% five-year mortgage and the beginning of the ‘inevitable’ return to ‘normal’ rates or whether or it is just another in a series of short-term blips before we return to record low rates once again.
Personally I do not think that that much has fundamentally changed over the past few weeks to warrant a prolonged rise in rates. I tend to believe that they will dip back down again over the next few months. So says my own crystal ball.
In any event with current variable rate discounts as low as .45% offering the opportunity for a new variable rate mortgage at a net rate of 2.55%, combined with many attractive short-term fixed rate options such as the two year fixed at 2.49% or the four year fixed at 2.79% many options abound for those coming into the renewal zone or about to begin shopping for a new home.
Three words of advice; everybody be cool.
***all rates mentioned above subject to immediate change and client qualification***
AMP – Accredited Mortgage Professional
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