Mortgage Rates Pushing Record Lows
The effects of the pandemic have sent mortgage rates down and are nearing record low levels. Five year fixed rates are just above 2% and variables are being offered under 2%. These are rates I haven’t seen in a very long time. On Wednesday the bank of Canada kept the overnight lending rate at 0.25% and noted that the economic outlook in Canada is uncertain if not bleak. There has been improvement here and around the world but this will not be enough to prevent an estimated 8% contraction in Canada this year. This will likely extend the period of low interest rates which are not expected to rise until the middle of 2021. We have already been experiencing a rebound in the local real estate but these low rates should provide a further boost to our Housing market. This of course doesn’t mean getting a fully discounted mortgage is easy. The lending criteria for a prime rate deal continue to be very tight and banks are often looking for reasons not to lend. Although banks have touted how they have helped consumers by providing clients the option to defer their payments, they failed to inform the borrowers that deferrals can prevent you getting an approval for a refinance. Good thing that not all banks are the same. Some lenders are not penalizing clients for deferring their mortgage payments and many borrowers are having success accessing cheap money. Don’t wait to consider a refinance. It’s an opportune time to review your financial situation and save money.
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