Last Friday, September 23rd, we saw a huge drop in the Government of Canada 5 year bond yield. This drop creates downwards pressure on fixed rate mortgages which are priced according to bond yields. Although fixed rate mortgages are priced at an all time low it appears that there is the capacity for rates to drop further according to this post from Canadian Mortgage Trends.
There has also been some continuing action in the variable rate market as the spread on Prime minus mortgages are shrinking. Given the current global economic climate it seems unlikely that the Bank of Canada will need to move the prime rate over the short to medium term. This makes variable rate mortgages an attractive option if the risk that the prime rate can be mitigated. As such Canadians have been switching into variable rate mortgages in a big way which has meant that the profit margins for mortgage lenders has begun to shrink forcing them to decrease the spread on their variable rate mortgages.
The following are my current rates; I invite you to get in touch with me to learn more about our rates and how you can get me to work on your behalf for free.
1 Year Fixed – 2.60%
3 Year Fixed – 2.89%
4 Year Fixed – 2.99%
5 Year Fixed – 3.49%
5 Year Fixed (45 day) – 3.39%
5 Year Variable P-.35 (2.65%)
50/50 Hybrid 3.12% (effective rate)
Prime Rate is currently 3.00%