Over the last few months we’ve all have heard is that mortgage rates are going up through the mainstream media. In fact over the last 4.5 years I have read the same story over and over again stating that rates will be going up in the next 2 – 4 quarters, but no rate increases?
Predictions like these in 2010 is what pushed a lot of consumers into fixed rate mortgages and effectively cost them extra money out of their pockets for the last 5 years.
Being one of the top mortgage brokers in Abbotsford, Mission and Chilliwack we feel it is our duty to dig deeper into consumer rates by following what drives these mortgage rates; the bond markets and its daily rate trends.
Bond rates drive the fixed mortgages rates we pay as consumers. They do this by dictating what the banks pays to borrow money for purpose of relending to you and me. For example banks turn around and re-lend this money out to you and me as a mortgage for +1.5% more than they pay roughly. As you can see in the graph below the bond rate has dropped about 0.50% over the last few months. That is huge!
Government of Canada Benchmark Bond Yields – 5 Year
Right now it is priced into the market that the 5 year fixed should be around 2.50%-2.60%. Do I think the big 5 banks are going to drop that low?… In our experience they won’t but a few select lenders will. If you need a better rate for your mortgage renewal, refinance or purchase call me and I will introduce you to the selective lenders who move their rates Monday!
If one of the big banks reduce their rates for this Spring the rest will follow but no guarantees they will come down. They are well within their rights to keep their rates as high as possible to drive their profits in these turbulent times.
While I do not expect the big 5 banks to lower their rates accordingly I see some lenders that Mortgage Brokers deal with lowering their rates more in line with the drop in the bond rates. I also predict this starts Monday!
If you would like us to review your current mortgage in hopes to save some interest feel free to call any time.
By Referral Mortgage Consultants*
“Click, Call, Chat – Award Winning Brokers”
1 – 32540 Logan Ave
Mission BCV2V 6G3
360-3033 Immel St
8387 Young Rd
Dave 604 897 2741 Jordi 604 615 1312
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*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp.