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Falling-Mortgage-RatesATB Financial, Alberta’s largest financial institution, is featuring its 5-year fixed rate at an all-time low of 3.09%.

It comes with a 90-day rate hold whereas most rates of this calibre require a 30-day closing.

“We have no idea how long it might last,” says ATB VP of Direct Sales, Peter Bolton.

This promotion is currently available through “preferred brokers,” says Bolton, and also through ATB’s retail arm.

Hopefully ATB’s move is some indication of how far deeply discounted 5-year rates could fall at other major lenders. Lending spreads certainly support it. We’ll remain skeptical on that, however, until we see some actual rate movement by the banks.

We’ve been hearing reports from bank reps that advertised 5-year fixed rates could “soon” drop at least 30+ basis points at the Big 6. But people are getting tired of hearing the word “soon.” (See: Banks Delay Fixed Rate…)

For the moment, banks will keep milking interest spreads for all they’re worth, hoping that bond yields rebound higher so they don’t have to cut rates as much (which is always possible).

On a side note, it’s been the “5-year fixed and variable show” so far in the market. Few lenders seem to be offering anything compelling in the 1- to 4-year fixed space. Opportunity abounds for lenders to sell 2- to 3-year fixed product in the mid-2% range.

One halfway decent deal is CIBC’s 3% cashback switch mortgage. It is available through select brokers for $400,000+ mortgages, and has an effective rate in the 2.77% range (IF you use the cash back to prepay the mortgage immediately). But, it also has a few big downsides, not the least of which is its 100% clawback of the cash upon early termination.


Rob McLister, CMT

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