Mortgage Interest Rate Review November 10th 2011

November 10, 2011

The mortgage interest rate roller coaster continues to enthrall its riders yet again. The latest twist came as Sheryl King, an economist at Bank of America, predicts that Europe’s worsening sovereign-debt crisis is going to push the central bank to cut its key rate down to .025% or 2.25% in consumer terms.  Her report predicted that the Bank of Canada would be forced to lower the prime rate by -0.75% in early 2012 to prevent Canada from slipping deeply in to recession. While there is nothing to indicate at this point that she is correct it will certainly be something to look out for as the year comes to an end.

In the mean time the Eruozone crisis has been putting a squeeze on bond yields and I would expect to see fixed rate mortgages ease down slightly over the coming week.
THE SON’S PICK OF THE WEEK:  If Sheryl King’s musings are correct then you may want a piece of the variable pie. A way to stay in the game but hedge your exposure is to consider a 5 year 50/50 mortgage where have your principal is charged 3.59% and the remaining half is charge Prime (3.00%).
1 Year Fixed – 3.08%
3 Year Fixed – 3.28%
5 Year Fixed – 3.59%
5 Year Fixed (must close by Dec 31st) – 3.39%
5 Year Variable P (3.00%)
50/50 Hybrid 3.30% (effective rate)
Prime Rate is currently 3.00%
Rates subject to change at lender’s discretion.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.