The Globe & Mail says “Canadians should be prepared for a modest hike in mortgage rates.” TD, however, just boosted their 5-year fixed rate a whopping 1/2%! That doesn’t happen too often.
Several more lenders announced fixed rate increases of their own–effective today or tomorrow. Others will likely follow.
Invis’s Gary Siegle says, “I expect we’ll start to see more of a shift to fixed (mortgages).” That’s probably a safe bet.
CIBC’s noted economist, Benjamin Tal, agrees. He feels now is a good time to lock in rates for the next five years, according to the Globe & Mail. Over at TD, Beata Caranci, director of economic forecasting, says consumers “definitely want to keep their eye on mortgage rates at this point in the cycle because we’re probably at the bottom.”
Of course, there’s no way of knowing how long fixed rates will remain higher, or if this is the first of many fixed rate increases. Regardless, with a handful of cheap lenders still out there, now might be an opportune time to get a rate hold.
Three lenders still offer under 5% on a 5-year fixed. We’re hearing at least one of these lenders will raise their rates tomorrow night and another requires a $500,000 minimum mortgage amount.
As for variable rates, TD economist Eric Lascelles says, “We don’t think the Bank of Canada is going to leap wholeheartedly into rate hikes immediately; we think they will be quite cautious on hold for the time being.” Let’s hope so.
Last modified: April 25, 2014
What, no change in the Bank Rate and a 0.25% bump in Fixed rates is sufficient reason to go hysterical and increase your monthly payment by $113/thou? Why were they in Variable in the first place? Underlying rates have a long way to go before the break point, and doesn’t the evidence show that, all other things being equal a client is almost always better off staying with the VRM?
Presently I have variable rate mortgage (prime-.75) from bank & I went asked for Fixed rate ,which they offered me at 5.25 %.I can handle upto 100/100k,but being herd mentality prevalent, everyone else is suggesting me to lock immediately.
What you think?
Where did you get Prime – 0.75 and how long ago?
Given that the best you will get these days is Prime – 0.6, I’d stick with what you have rather than going to fixed. Think of it this way, with Prime-.75, the BoC is going to have to raise rates an awfully long time before you are losing.