Rates Moving Up…Again

Mortgage rates made new 5-year highs yesterday, rising for the 3rd time in three weeks. The big banks’ posted rates are now as high as 7.29%, up 0.70% since May 17.  CBC story

5-Year Mortgage Rates

Rob Carrick from the Globe & Mail proclaims, “The golden age of variable-rate mortgages is over.”  He cites economists that forecast a 6.5% to 7% prime rate within one year.  That implies variable rates will rise to about 5.65% to 6.15%.

CIBC economist Benjamin Tal, who a few months ago felt mortgage rates would remain low, now says, “Locking in now would not be a mistake.  In fact, it could be a good thing.”  Globe & Mail Story

Many “experts” believe the Bank of Canada will raise rates 1/4% on July 10 to combat what the BofC calls “excess demand” in our economy.

  1. So the posted rates have gone up, but we all know that only people with wicked-bad credit are forced to pay the full posted rate. What’s the current “typical” 5-year rate available to somebody with really good credit?

  2. So the posted rates have gone up, but we all know that only people with wicked-bad credit are forced to pay the full posted rate. What’s the current “typical” 5-year rate available to somebody with really good credit?

  3. Hi George,
    Posted rates are used in mortgage-related stories primarily because they are standardized and can be compared with past data.
    In practice, as you note, good borrowers get a healthy discount from posted rates. This discount is generally about 1.35%…in some cases more.
    Have a good weekend

  4. Hi George,
    Posted rates are used in mortgage-related stories primarily because they are standardized and can be compared with past data.
    In practice, as you note, good borrowers get a healthy discount from posted rates. This discount is generally about 1.35%…in some cases more.
    Have a good weekend

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