More homebuyers are opting for short\u002Dterm fixed\u002Drate mortgages these days in hopes of a rate cut down the road. Find out more
“During the pandemic, mortgage rates reached historic lows, dropping as low as 0.85 per cent for a 5-year variable rate and 1.39 per cent for a 5-year fixed rate,” he said in the report. “Variable rates became more popular than usual, accounting for over 20 per cent of Ratehub.ca mortgage rate inquiries.”
“The best five-year fixed mortgage offering is currently 4.29 per cent; that spread of 126 basis points, combined with the stability of a fixed rate in an otherwise volatile rate environment, has made it desirable to lock in once again,” wrote Graham. “Consumers are currently more interested than usual in short-term fixed rates because many experts are predicting that rates will drop in the coming years,” said Laird. “Getting a short-term fixed rate allows borrowers to take advantage of future lower rates sooner.”
Laird said variable rates are not likely to regain their popularity until the Bank of Canada actually cuts rates — and that could be some time to come.
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