Is it Time to Lock-In your Mortgage Rate at Today’s Low Rates

Real Estate Agent with Re/Max Ultimate Realty Inc. Brokerage

You would have to go back to the 1950's to find low mortgage rates such as we are experiencing today. The big question around Toronto real estate and Mississauga real estate circles these days is  "is it time to lock-in your mortgage at these low rates"

The Bank of Canada recently lowered its benchmark lending rate to a historical low, but more unexpectedly announced that they would keep this rate steady until at least June 2010 due to current economic conditions. That means the major banks are not expected to increase their lending rates either. In fact a number of prominent economists have recently commented on mortgage rates, one going so far as to say mortgage rates could come down a bit more.

A five year fixed rate mortgage can be had these days for a discounted 3.95%, a variable rate even less. At these low rates some people will be tempted to break existing mortgage agreements to save on interest payments. Unless you are in the last year of an existing loan agreement the costs to do this are usually prohibitive. If you are in the last 12 months of a mortgage term ask your lender about early renewal at no cost to you. You will find many lenders will want to keep you as a client, especially if you have been diligent in paying on time.

If you have one of those variable rate mortgages with a discount off the prime rate, you may be asking yourself if it is time to use the escape clause in your loan agreement and lock-in for a five year term. In view of the Bank of Canada statement of current rate stability until June 2010 the answer to that question is no. Rates would have to rise by two percentage points to match today's discounted 3.95% five year fixed rate.

Do you think rates are going up by two percentage points by June 2010?


John Lavin is a full time realtor with 24 years experience helping buyers and sellers of homes, condominiums and investment properties in Mississauga and Toronto. If you are in the market for Mississauga Condos for Sale please visit

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