High ratio or 25 year amortization 5 year variable at 2.50% and 5 year fixed at 3.34%. Conventional mortgage over 30 years 5 year variable 2.85% and 5 year fixed 3.64%
The fixed rate has being bouncing around for the past 12 months. I would say in last year it has been as low as 2.89% and as high as 3.74%. This is mainly down to Bond and stock markets. When people sell bonds mortgage rates go up. With Trump getting into to power there’s been a constant back and forth swing in the market especially over past 3 to 4 months. These rate swings have nothing to do with our economy. Once things settle down again in the rates will settle back down.
Variable rate is controlled by the Bank of Canada and is related to our overall economy. There has been some noise in the media predicting a couple of increases (.25% at a time) over the next year or two. I would say this is possible mainly to control consumer debt and the valuations in the Real Estate Market. The economy is starting to slow down again so it is really just the Real Estate Market that needs a little adjusting. The Bank of Canada cannot afford to increase rates by too much. So even if we get a couple of increases they will most likely in a year or two come down again as the economy weakens and needs a boost.
The spreads right now between fixed and variable rates is close to 1%. If you were in a variable it would take four increase in the Bank of Canada prime/variable rate to get you to where the fixed rate is today.
If you have any questions or concerns please do not hesitate to reach out to me directly.
Residential and Commercial Mortgage Agent
SAFEBRIDGE Financial Group
Broker License #10524
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