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.

 

Six-month open  6.45 per cent (increase by 0.10 per cent)

1-year open       6.45 per cent     (increase by 0.10 per cent)

1-year closed     3.80 per cent     (increase by 0.10 per cent)

3-year closed     3.95 per cent     (increase by 0.10 per cent)

4 year closed     5.29 per cent     (increase by 0.35 per cent)

5 year closed     5.84 per cent     (increase by 0.35 per cent)

7 year closed     6.80 per cent     (increase by 0.20 per cent)

10 year closed   6.95 per cent     (increase by 0.20 per cent)

 

As you can see in the bold there was a 35 point increase on both the 4 year and the 5 year rates.  Now that one bank has done it, unless the bond rate drops a bit, you can bet that all the other banks will be on board with raising their rates as well.  One lender had this to say about the increase in the bond market” The good news is that we are still in that “comfort zone”, however no more downward movement on the fixed rate side is expected.

 

For all those that were thinking the rates were going to go down lower might want to start thinking about getting pre-approved.  If you have a renewal, refinance, or looking at purchasing in the next 120 days I would say NOW is the time.  The last time the bond rates jumped up a couple months ago I though that would be the end of the low rates, and it was for a few months, but now there seems to be other things coming into play.  The unemployment rate is lowering, the housing market, at least in Alberta, seems to be smoking hot again, and there seems to be much more consumer confidence that the economy is rebounding.