Historical Rates updated…Canada reports job losses.. Fixed rates drop
Here’s an updated chart that shows Fixed and Variable mortgage rates over the past 25 years…. click here.
Fixed rates drop again
Seems like it was just yesterday when we heard reports of mortgage rates going way up…. Posted Fixed rates fell again with RBC dropping their 5 year fixed rate to 5.59%. Discounted 5 year fixed rates are now available at 3.89%…and Variable rates are hovering at around 2.10%.
Canada loses 139,000 jobs in July
Quoting a report from CBC.ca, Statistics Canada shows some cities improved their unemployment figures…but overall, we have few full-time jobs and more part-time jobs… The recovery from the recession still seems to be headed in the right direction but this is definitely a speed bump that will slow us down..
The good news is for borrowers of money… interest rates shouldn’t go up in any hurry… in fact, we have seen fixed rates drop over the past 40 days…. watch for flat or modest rate movement over the next several months.
Steve Garganis View All
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.
I’ve been looking for charts like these for a long time. However, something doesn’t make sense in those few occasions when variable is equal to or greater than fixed rate. If I entered the bank in January 1990, according to the tables, I can either sign a 5 yr fixed rate at 12.01% or a variable at 13.5%. Why would the bank intentionally lose this potential and put itself at risk for five years?
Variable rate mortgages have outperformed Fixed rate mortgages in over 88% of the time… When I say outperform, I mean they were a lower cost option than fixed rates…. You are looking at interest rates between January 1990 and March 1991…. this is the peak of the last great recession… this is also the last time Canadian house prices dropped between 25% and 50% in one year….
It’s important to remember this was during a financial crisis. And because of this, the fixed rates were actually lower than the variable rate…. But only for about 1 year….This is not normal. Variable rates are usually lower than Fixed..
If you look at the chart for the next 20 years, the Variable rate was lower.. and if you look for the previous 20 years, it was lower again (except for the periods during a recession).