In many cases, investors can’t (or aren’t) differentiating between U.S. and Canadian mortgage-related investments. Even though our real estate market is far stronger than the American market, these investors are demanding higher risk premiums all around. That’s pushing up Canadian variable rates–even for people with good credit.
Variable rates are typically priced at prime rate less a discount. That discount has been as much as 1.01% below prime in recent months. Now we’re seeing some big lenders cut their discounts, to prime – 0.50%
If you need a variable rate mortgage in the next four months, we urge you to lock in your rate now!
In a related story, many Canadian banks, non-bank lenders and mortgage brokers have been slashing staff lately. A lot of good mortgage professionals are losing their jobs. It’s a growing concern for us in the industry because not only are choices dwindling for borrowers, but the job cuts mean that mortgage service is deteriorating as well.
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