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Fixed Rates Shoot Up .3% Overnight While Variable Rates Rumoured To Decrease by .25%

 

All the murmurs of fixed rates rising finally came to fruition

as rates jumped as high as .3% overnight as the rate hike dam burst. This means that someone seeking a $500,000 mortgage needs to pay almost $1000 more a year than they did yesterday - procrastinating is getting expensive. Get pre-approved to have your rate reserved and consider a variable rate which is rumoured to go down in the coming months.

 
 
 

Why are Fixed Rates Going Up?

The Canadian five-year bond yield increased from around 0.5% to 0.65% last week and in short, when bond yields go up, fixed-rate mortgages follow.

Bond Yields usually go up due to economic recovery which is on its way as COVID-19 vaccine rollouts accelerate. Mortgage expert James Laird added that should Canadian inflation ride the wave of optimism brought about by the federal government’s vaccine roll-out, “Canadians should expect fixed rates to continue on their upward trend.”

 
 
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Should I Consider A Variable Rate Now?

As fixed rates continue to rise, it may be time to consider a variable rate which is rumoured to drop .25% in the coming months and is not projected to rise until 2023. Besides variable rates historically being lower than fixed rates, they have 10% of the breakage penalties that fixed rates have and usually are less volatile than people think.

How can I protect myself against more rises?

You need to get a full pre-approval with your local mortgage broker where your documents are all submitted and they can send your application to a lender to accomplish the below:

  • You get your rate held for 120-days

  • You understand your bargaining power in bidding wars with a firm mortgage budget

See what you qualify for or contact Paul to get your pre-approval.

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Current Events, Mortgage RatesPaul DavidescuRates, 2021