Mortgage rate changes? Some background.

5 year fixed Rates Going up Monday!

All Indications are that we will see a rate hike early this week, approximately .25% increase, landing around 3.79% for the 5 year fixed term.

Lenders are currently taking bigger spreads on mortgage funds because of the insecurity on market conditions, thereby affecting bond rates. Normally the spread between what the bank pays for money and lemds out money is 1.45 - 1.75%, while right now they are wanting a spread of 1.75-1.95%. The bond market which drives the fixed rate market has been very up and down this past month.

The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy. Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended. Although we may see small increases in interest rates as we move forward, the Canadian Market should remain strong and provide a stable investment opportunity.

Thanks to Rod Minnes of Global West Mortgage.

Dwain Anderson

Dwain Anderson

CENTURY 21 Fusion
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