Quick question for you.
What’s falling as fast as oil prices but not getting anywhere near the attention?
The answer – with a hint in the headline – is the yield on five-year Canadian Government bonds. The bond yield fell to a record low of just a hair over 1 per cent this week.
That will hopefully spur lenders to drop their mortgage rates to record lows as well. We’ve seen a little downward movement but nowhere near a proportional drop.
Most lenders are at 2.89 per cent for five-year fixed rate mortgages this week. Slightly better offers can be had with quick-close specials.
A quick close special typically offers a slightly reduced rate if a mortgage can fund within 30 or 45 days (depending on the lender) of the application date.
Lenders will try to drag their heels on dropping rates in a bid to maximize revenues and profits.
But at some point a lender may break ranks in a bid to grab headline attention and market share.
If you are in the market to buy a home, now would be a great time to get a pre-approval and get a 120 day interest rate hold while you are shopping for your home.
People with significant equity in their homes and who are paying higher interest rates may consider refinancing to a lower rate. You’ll likely pay a penalty but the savings may more than make up for that.