What this means for fixed rates is a return to numbers nobody thought we would ever see again.  Currently 5 year fixed rates are below 4.00%, with some lenders offering specials down to 3.79%!

 

Much of the reason for the bond yields dropping is due to Investors getting scared fo the stock markets as negative economic news flows out of the US, and an economic recovery there seems a long way away.

This represents an opportunity for those who did not lock in recently as they can continue to float, but we can look at holding a fixed rate for them later in the year once the fixed rates turn around.

 

This also leaves the Bank of Canada in a precarious position, they want to increase Prime at least a little more, as the two .25% increases (June & July) only gives them .50% from the all time lowest Prime rate, and they would like to have more room to lower later if a double dip recession surfaced.  However, any more than a .25% increase for the remainder of 2010 seems extremely unlikely due a slowing Canadian economy and overall world economy that is not looking strong.