That’s squeezed gross lender margins on deeply-discounted five-year rates to near 1.00% (1.20% can be considered “normal”).
As a result, ultra-low fixed rates are in danger of ticking 10+ basis points higher, especially if this yield trend continues.
The 5-year rates we’re seeing in the market seem like aberrations in light of all this. Depending on what province you live in, there are brokers and/or lenders advertising 3.54% to 3.79% on 5-year money. Those rates are gifts from the heavens. They may not last long (in the short term at least) unless yields drop soon.
Keep in mind, these perspectives refer to fixed rates in the short term. This says nothing about what rates will do further out, and is not a recommendation to lock in (if you’re in a variable). For advice of that sort, the best bet is always to call your mortgage advisor and ask for guidance based on your specific circumstances.
Rob McLister, CMT
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