TD Canada Trust has trimmed its posted 5-year fixed rate by 15 basis points, from 6.25% to 6.10%.
That comes with bond yields down 30 basis points from the last time fixed rates increased on April 26. (Bond yields generally lead fixed-mortgage pricing, but not always on a one-to-one basis)
If the other banks follow as expected, and barring further changes, then:
- The new benchmark for a discounted 5-year fixed rate will drop to 4.70%. Expect banks to provide at least 20 basis points “discretion” off this rate if you’re well qualified.
- Competitive broker rates for 5-year fixed terms are under 4.50% and may drop a bit more if bond yields don’t rebound.
- The qualifying rate will change to 6.10% on Monday, May 17. If you choose an insured mortgage with a variable or 1-4 year fixed term, lenders will make sure you can afford the payments at this rate.
None of TD’s other rates were changed.
Have we seen the BoC Posted Qualifying rate change on the Sunday night/monday morning? I have only seen it change on Wednesdays, which is great, as it allows my team and I a heads up for our clients that we need to get their approvals in by the end of the week.
CMHC sets the qualifying rate on Monday based on the BoC’s v121764 series which is updated on its website on Wednesday.
So the qualifying rate will have a slight lag
which in a rising rate environment may benefit some people.
Update: BMO just matched TD’s 15 bps cut, but they didn’t lower the rate on their 5 year “low rate fixed” (i.e. low-frills) mortgage. They left it at 4.35%.
I cant see why we are even talking about fixed rates when the world is still in recession.I have been using variable rates for over ten yrs and it always has proven to be a better way to go. Look at the situation in Greece and Asia , it will have an impact on our economy sooner than later. Job numbers look great here in Canada but I expect that will change as the world economy changes and rates wont go as high as the gouging big banks predicted.Get yourself a low variable rate and you will save money .
Doesn’t matter what you go with, fixed or variable, the housing bubble is going to pop before the end of the year and anyone who bought in the last three years is going to be bleeding money like a bad rap video.
Look for the housing market and its prices to correct roughly 30-40% downward, by my data/analysis.
and which “data/analysis” would that be exactly?
Hi variable..,
We appreciate your post. Thank you.
Among other things, fixed rates are relevant because variables are not appropriate for everyone, not everyone qualifies for a variable, and 68% of Canadians still prefer fixed rates at last count.
Cheers,
Rob
variable supporter – when in the past ten-plus years have you been able to get a <4% fixed rate mortgage?? Those that locked in for five years at around 3.60% in the past few months will be glad they did. In the past ten years, we were never in a rock-bottom rate environment with nowhere to go but up, so your analysis doesn't really apply.