Fixed Mortgage Rates are going Up!
Fixed Mortgage Rates are going Up!!
So what are the rates going to do? Well here is the information and I’ll let you decide. The 5 year bond rate, one of the biggest key indicators for 5 year fixed rate mortgage rates, has just increased over 23 points. The bond 5 year bond rate has been increasing for the last couple of weeks but this is the largest jump in the last year. Not very long after the jump, Royal Bank announced an increase in their mortgage fixed rates. Here is what they have announced.
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Is a Variable Rate Mortgage the way to go right now?
Low 5 year variable home loan rates
Some good points about a Variable rate Mortgage
There is no denying that Variable rates are Low. So low in fact that the average Canadian is starting to take a second look at the 5 year Variable rate Mortgage, when before it was all about the 5 year fixed. 1-3 years ago I would rarely have anyone ask me what my opinion on what is better the fixed or the variable, because the majority always went with the fixed. Now everyone keeps asking me, “what you think is the best way to go?’ So here is what I think and I’m not the only one thinking the same thing.
The 5 year variable or even the 4 year variable closed are at prime (2.25%) or slightly under prime. A couple of months ago you were lucky to get prime +. 4(2.65%). Yes you will have the best rate in town for the next 6-12 months and then most of the economists are expecting rates to rise. How fast rates rise and by how much, no one knows for sure and everyone seems to have a different opinion about that subject. Also remember that before all the mess in the U.S variable rate mortgage were prime - .8 - .9%. So prime doesn’t seem like such a deal when you compare it to prime - .8 - .9%
Professor Milevsky (at York University) who wrote a scenario based report on how more people should take a look at the variable option, in 2001, has made some interesting points. His recent comments suggest, now might not be the best time for a variable rate mortgage. Financial Post writer, Garry Marr, says Professor Milevsky is now “leaning somewhat in favour of the five-year closed fixed-rate mortgage.” Marr also writes, “Consumers getting into variable rate products are facing the risk that the discounts they negotiate today will look pretty ugly in a few months.”
With the 5 year fixed rate mortgage you are getting some of the lowest rates ever in History and you are guaranteed it won’t rise during that term. In short my answer is, “either way it is up to you, as you are the one whose name is on the mortgage”. But as well keep in mind that we are in uncertain economic times and my thoughts are to go with the fixed rate mortgage. We have mortgage rates as low as 3.69% currently and the average bank is under 4% on a 5 year fixed mortgage. For those that just can’t make up your mind you can always do Matrix type mortgage that can combine part variable and part fixed. That way if you make the wrong decision you’ll only be half wrong. Or if you look at the glass half full you would half right!! If you have any questions or comments please feel free to contact me.
Variable Mortgage Rates - 5 year Variable 2.25%(prime)
Current variable mortgage rates are very low but how long will they stay low?
Variable Mortgage Rates- 2.25% 5 year variable rate
On July 21, 2009 the Bank of Canada did not change the Over night lending rate which directly affects variable mortgage rates. Current variable mortgage rates are as low as Prime (2.25) right now and not looking on going up. 2 yeas ago and even up to mid 2008 Prime minus mortgage rates were common and now it looks like variable mortgage rates are coming down again. With everybody looking to get the lowest mortgage rates current variable rates are looking very attractive.
