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Historical Rates updated…Canada reports job losses.. Fixed rates drop

Historical Rates

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.

Sounds like a broken record…5 yr Bond rates remain low as do mortgage rates..

We’ve reached the middle of summer and there is very little to report… hey, that’s a good thing.. remember, boring is good when it comes to mortgage rates..

Remember those Experts that called for people to lock into a long-term fixed rate at or around 4.00% last year?.. Variable rates have been under 2.00% for over a year and recently went above 2.00%….   I do understand why some would call for us to lock in….but I’m glad I wasn’t one of them…

Look at today’s 5 year bond rate and it’s 2.29%… WOW!   That’s unbelievably low… the 5 year fixed rate is priced from the Bond market and normally, we will see a spread of 1.20% to 1.40% above that… so really, we should be seeing fixed rates as low at 3.50% but the Banks are taking advantage of the spreads and maximizing their profits…..

Let’s not be in too much of a hurry to improve bank profits….

Watch for possible increases in fixed and variable rates later this year.. but remember, we’re still near record low rates.. they will go up, but slowly… no need to panic… yes, this is boring news.. but boring is good…

G20 Toronto smashes bank windows…Big Six lower their Fixed Rates

In case you’re wondering how the G20 Summit affected Canada’s mortgage business…. Most Lenders have their head offices in the heart of Toronto… and most all of them issued notices that turnaround times and disruptions may occur…Fortunately, Lenders have back up plans because of past emergencies likes 9-11, SARS and the Blackout.

Oddly enough, the Big Six Banks all lowered their Retail mortgage rates over the past few days…. 10bps is not a big drop, but any rate drop should be welcome news to all Canadians.

  • Posted 5 year fixed rate is 5.89%.  This is also the qualifying rate for mortgages with less than 20% down payment and terms less than 5 years and for Variable rate mortgages…..
  • The best discounted 5 year fixed rates seem to be around 4.39%…
  • No changes for Variable rate pricing… Big Six are advertising Prime less 0.35% as their best but wholesale rates are at around Prime less 0.60% and sometimes better.
  • Big Banks giving big push for Hybrid mortgages….and although I’m not a fan of these products for most of us, there may be a place for them for some of us….just make sure you are fully aware of all the pros and cons of this product.

Just a personal comment about the G20 Summit… as someone who was born and raised in Toronto, I was saddened by the images that flashed across our TV set…police cars on fire…broken windows, masked protesters…This isn’t a true reflection of our city…our city has the reputation of being one of the cleanest, safest and friendliest in the world… I hope that message made it’s way to the rest of the world….

Rates hikes may be stalled

Bad news is good news for borrowers…  problems some European economies and other parts of the world could stall the much talked about and anticipated rates hikes..

Bank of Canada Governor, Mark Carney, said the timing of future interest rate hikes is not ‘pre-ordained’.

This just goes to show that even the best Economists don’t have a magic crystal ball….    Fixed rates are still very low, and Variable rates are even lower… 5 year fixed rates are hovering at around 4.39% and Variable rates are at around 1.90%…

This all adds up to good news for borrowers…  Enjoy the low rates!

Bank of Canada raises rates by 0.25%

As expected, the Bank of Canada raised it’s Target lending rate to 0.50% from 0.25%.   This prompted most Banks to raise their Bank Prime lending rate to 2.50% from 2.25%.    But there is some uncertainty about when the next increase will take place as reported in The Star.…. and oh yes, the increases will happen.. not ‘if’, but ‘when’.

Economists have said repeatedly that the Bank of Canada must raise their rate to slow the economy and keep inflation in check… The Target inflation rate is 2.00%.    Most Economists agree that they only need to raise this by 2.00% to 3.00% to have the desired effect.  (See a full report)

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