Fixed-rate mortgages heading down

Fixed-rate mortgages heading down

Fixed mortgage rates have already begun to drop slightly at many banks. But longer-term fixed-rate mortgages depend on the bond market, not the Bank of Canada’s overnight rate. With yields on longer-term bonds steadily falling and now at historic lows, it’s not surprising that fixed mortgages have begun to slide.

A five-year fixed mortgage now carries a posted rate of 4.79 or 4.84 per cent at several banks, down 0.10 or 0.15 of a percentage point over a week ago. Most borrowers will pay considerably less than the posted rates.

TD Bank, for example, on Tuesday lowered its “special fixed-rate offer” for a five-year closed mortgage by a fifth of a point to 3.09 per cent. Many smaller lenders and independent mortgage brokers can offer even lower fixed mortgage rates.

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