RBC is again leading the Big 6 banks with a 10 basis point rate cut on all fixed-rate mortgage terms.
This is the third such rate reduction in the last 16 days.
RBC’s posted 5-year fixed is dropping to 5.39%. Its “Special Offer” 5-year is going to 4.24% (which is totally unreflective of the actual market of course). Other banks will generally match or exceed RBC’s cuts.
Fixed-rate funding costs have plunged in recent weeks on the back of ominous North American economic data. The 5-year government yield is now 2/3 percentage point below its one-year high from April 8.
On the street, rates on 5-year fixed mortgages have nose-dived to 3.69% or less.
Sidebar: On Monday, the qualifying rate drops to 5.49% for high-ratio 1-4-year terms and variables. The qualifying rate will then move again to 5.39% on Monday June 13—assuming rates don’t change a 4th time by then.
Rob McLister, CMT
I don’t understand why banks advertise 4.24% for a 5y fixed. Who are they trying to kid???
The majority of Canadians that still don’t ask for the banks best rate when shopping for a mortgage.
Put another way…advertised bank rates are really just a tax on people who are too lazy to shop around.
Whats the lowest the 5 year fixed has been? We locked at 5/35 for 3.44 in Dec/Jan.
I heard of people getting 5yr fixed at 3.29 back in October/November
Hi Jason, The lowest I can recall off the top of my head was 3.19% but there may have been slightly lower.
On mortgages over $400,000, CIBC’s 3% cash-back switch product had the lowest of all…if you consider the effective rate of using its cash as a prepayment.
Rob
Hey guys, I just walked by Northwood Mortgage brokers in downtown Toronto (King & University) and they have lowered their 5-year advertised fixed rate there to 3.61%! The lender for that is “FN”
Sorry, meant to say True North Mortgage (not Northwood – got that jingle in my mind from the radio commercials)
Nice plug. Thanks for the spam.
From experience I can tell you don’t fall for the lowest rate, because your application is dependent on your credit history, job history, income and other factors. You can get the “best” rate only if all your ducks are in order….
From experience I can tell you that in order to get the lowest rate you have to have a very strong application…very good credit (beacon of over 750), very good income, good job history etc. Lending rate is based on the risk to the lender. So if a bank advertises 4.24 they are probably going to be more flexible than the lender at 3.69…
Your application doesn’t even need to be that good to get best rates. Really, a beacon score over 680 will usually do it (assuming everything else is in order)…