What’s going on with rates?

Bank of Canada has held true to their last statement that the key lending rate would remain at 0.25%. Bank of Canada has set their next announcement for July 21^st. This should leave the Prime rate fixed at 2.25% with many banks.

With fixed rates on the rise, many lenders are moving above the 4% threshold they have stayed below for the last month. The pressure from the Canadian bond market has forced earning spreads for the lenders to below 2%. Many lenders find it difficult to make profit in this territory and have recently been moving their rates up. RBC was first to increase their 5 year posted rate by 0.20% to 5.45%, shortly after the remaining 4 major banks followed. However, there are some rates holding below 4% and if you are considering buying or refinancing it could be worth a call to your Mortgage Agent as we may not see fixed rates this low again.

However, if you aren't lucky enough to lock in to one of the great fixed rates due to your mortgage renewing later this year or early next year, you may want to turn to variable rates. Many lenders have begun to make their variable rate products more attractive to potential mortgagees. The lowest we've seen is 2.65% or Prime - 0.40%.