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The big banks have moved their 5-year posted fixed rates down to 5.55%.  That’s a record low, breaking the 5.70% mark from July 2005.

5-year-fixed-rate-chart

The banks new “special offer” rate (a more accurate benchmark for fixed rates) is now 4.25%.  So if you have a strong mortgage application and want a 5-year fixed, that is the most you should pay.

BMO economist, Sal Guatieri, says, recent rate cuts have “led to the best housing affordability in four years" and that these latest reductions enhance affordability further.  He’s right of course, and it will be interesting to see if that offsets the economic beating we’re taking and adds buoyancy to Canada’s housing market.

Other factoids of note:

  • The all-time low on record for any term over four years is 5.00%, way back in 1951. (That 5.00% was for a 25-year term. 5-year mortgage data only goes back to 1970.)
  • The average 5-year rate over the last 10 years is 6.95%.
  • The 10-year high was 8.75% in 2000.

Given where we’ve been, it is crystal clear that fixed rates today are in serious value territory.

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