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Mortgage Rate Party Continues

It’s not enough to pop champagne over, but mortgage shoppers are nonetheless happy with recent rate trends.

The 5-year government yield (which leads 5-year fixed rates) made a new five-month low today.


(Click to enlarge)

The spread between 5-year posted rates and the 5-year bond yields is now the most it’s been since October, and 45 basis points above its 10-year average. As a result, fixed rates should drop a bit further from here.

Here’s a look at rates currently being quoted on the street for AAA-quality borrowers:

  • 1-year Fixed:  2.64% (In general, 1-year pricing is poor relative to the cost of funds. It should improve soon.)
  • 3-year Fixed:  2.99% (Through select brokers)
  • 5-year Fixed:  3.79% (Applies to “quick closes.” 6-month rate holds can be had for just 3.99%.)
  • 50/50 Hybrids: 2.97% (i.e., Half fixed and half variable; applies to quick closes.)
  • 5-year Variable:  Prime – 0.85%
  • HELOC:  Prime + 0.50%

Note: These are samples of nationally available rates. Your rate may be higher or lower depending on your qualifications, location and mortgage type.

For example, if you’re in the Vancouver/Victoria area, rates are even lower thanks to intense credit union competition.

If you aren’t closing in 30 days, the best available rates are often at least 10 basis points higher.

As always, speak with your mortgage advisor for a quote specific to your circumstances.

Rob McLister, CMT