Fixed rates going up! Surrey, BC - June 2, 2009 - The Banks are moving to a higher discounted 5 year fixed rate as of tomorrow, moving their rates from the 3.75% range to 4.00-4.09% as we expected. They are using the recent increases in Bond yields to justify the move. The Bank of Canada meets next on Thursday, June 4th, when they are expected to leave Prime alone.
This bump was expected, and will stay in place for a few weeks until the US gets another bout of bad news and the stock markets drops again...then the money flows out of the stock market and into bonds, which drops their yields and then fixed mortgage rates. We expect to see this patern occur over & over during the next year or so. The US is still heading in a downward spiral and has not hit bottom as of yet despite the Obama government trying to paint a positive spin onto it. With GM in bankruptcy and more jobs likely lost, they are not out of the woods by a long shot, and that means overall low rates until they are...probably still 18 months away.
Variable rate mortgage products continue to make the most sense in this environment, and we are seeing some more competion amongst lenders, with most at Prime + .60% (2.85%) now, and one at Prime + .40% (2.65%). If you are in a variable currently, stay in it! If you are in a fixed, please touch base with us and have a review of whether it makes sense to move to a variable at this time as part of your mortgage strategy.
As always, having a Mortgage Strategy in place is always the best plan!
Call us for a no obligation review at anytime.
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