Mortgage Interest Rates

Stay up to date with mortgage interest rates.

Mortgage Interest Rate Review January 19th 2012

Late last week while I was away in Punta Cana for the Mortgage Centre Annual conference lenders announced their newest fixed rate mortgages. Lenders are now offering 3.15% for a fixed 5 year rate mortgage which has again set a new low for fixed rate mortgages. Some borrowers might be surprised that the new rates announced by lenders aren’t quite as close to BMO’s 2.99% as they might have hoped. The truth is that at 2.99% the bank is not making any profit from the mortgage after considering their borrowing costs and administration costs. So the question begs to be asked, why would the bank be giving money away for free? The answer is two fold.

1) BMO has been losing mortgage market share over the past couple of years. Mortgage market share is important to the bank because inevitably their mortgage borrowers will open investment, savings & chequing accounts which drive profits.

2) The move to give money away is very intentional this time of the year because it is the beginning of RRSP season. The more people to visit a BMO branch the more opportunity they will have to cross sell RRSPs and other products.

Son of a broker’s pick: You can’t go wrong with the fixed 5 year at 3.15% and if you are feeling particularily rate sensitive the fixed 4 year at 2.99% is the answer. You get all the bells and whistles with out the restrictions of BMO’s offer.

CURRENT RATES

1 Year Fixed – 2.99%

3 Year Fixed – 3.09%

4 Year Fixed – 2.99%

5 Year Fixed – 3.15%

5 Year Variable P-.10 (2.90%)

10 Year Fixed – 3.99%

Prime Rate is currently 3.00%

Rates are subject to change and subject to the lender’s approval.

Mortgage Interest Rate 5 Year Fixed – December 22, 2011

We’ve reached a new low. The 5 year fixed rate mortgage is @ 3.25%. Incredible.

Earlier this fall I mused on my blog that fixed rate mortgages had run their course and would hold steady or trend upwards gradually into 2012 and beyond.  I thought that the period of ultra low fixed rate mortgage money was over  and that banks wouldn’t pass on rate discounts to borrowers any longer. But just this past weekend Merix Financial introduced a new fixed 5 year mortgage at 3.25%. This is the lowest fixed 5 year mortgage rate we’ve ever been able to arrange over the 34 years of our brokerage Tridac Corporation Limited.

If you want this rate give me a call at 416.461.0204×2 to discuss. Keep in mind that my services are free of charge to you as I get compensated by the mortgage lender through a standard finders fee.

Mortgage Interest Rate Review December 06, 2011

The Bank of Canada met this morning for the last time in 2011 to make their interest rate announcement. As was widely expected the bank left the prime rate unchanged at 3.00%. If you have a variable rate mortgage or a line of credit your monthly payment won’t change. The bank reported that conditions in global financial markets have deteriorated as the sovereign debt crisis in Europe has deepened. The recession in Europe is now expected to be more pronounced than the Bank had anticipated.

Closer to home, recent economic indicators in Canada suggest that growth in the second half of this year is slightly stronger than the Bank projected.

Although the crisis in Europe has effected bond prices, which are driving the yield down (typically a trigger for lower fixed rate mortgages), I am not certain that banks will be willing to pass on those prices to borrowers and I feel that fixed rate mortgages will remain unchanged and stable into the new year.

Son Of A Broker’s Pick Of The Week: The fixed 4 year at 2.99% offers you the lowest rate for the longest term and is the best bang for your buck today. Fill out a quick online application and I’ll be in touch shortly to set you up with a 120 day ratehold for 2.99%.

1 Year Fixed – 3.08%

3 Year Fixed – 3.29%

4 Year Fixed – 2.99%

5 Year Fixed – 3.39%

5 Year Fixed (must close by Jan 31st) – 3.29%

5 Year Variable P-.10 (2.90%)

50/50 Hybrid 3.25% (effective rate)

Prime Rate is currently 3.00%

Bank of Canada Qualifying Rate for High Ratio Mortgages 5.29%

The following is a graph I sourced from my good friends at Ratehub.ca which shows the recent convergence of fixed and variable rate mortgages. Starting late August 2011 it’s clear to see the upwards trend of variable rate mortgages converging with a relatively flat fixed rate market.

 

Mortgage Interest Rate Review Novermber 23rd 2011

Mortgage interest rates have stayed relatively stable as there has been some stability in the Government of Canada bond market over the past 2 weeks.

Son Of A Broker’s Pick Of The Week: If you require your mortgage in 2011 the 3.29% is a no brainer. I expect to see that rate continued into the new year.

1 Year Fixed – 3.08%

3 Year Fixed – 3.35%

5 Year Fixed – 3.49%

5 Year Fixed (must close by Dec 31st) – 3.29%

5 Year Variable P (3.00%)

50/50 Hybrid 3.25% (effective rate)

Prime Rate is currently 3.00%

The following graph compares the discounted weekly fixed 5 year rate vs. the discounted variable 5 year rate since January 2011.

This graph is sourced from my friends at Ratehub.ca and is sample of what type of mortgages visitors to their site were requesting last week.

 

 

Click Here to apply for your mortgage today.

 

Mortgage Interest Rate Review November 10th 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.