Bond rates have continued to inch downward the past week. If this continues, we will likely see some further softening of long term rates. Several lenders did lower their rates by 10 basis points. 5 year rates continue in the 3.49-3.89%. Variable rates are increasingly becoming a more attractive option for many, with rates in the 2.50-2.70% range.
The Bank of Canada did not move rates last week. The article today speaks of the chance of the rate being lowered. This is the first reference to this we can recall in the last several years. We will have to wait and see what happens. This does however, support the thinking that variable rates may be a better choice for those with the tolerance for risk.
If your mortgage is renewing in the next 6 months or you are thinking of refinancing, we strongly recommend you start the process now.
If you have a variable rate of any more than prime +.25 or a fixed rate of 4.25% or more, we should explore the merits of refinancing to a lower rate. It may result in savings of thousands of dollars and a longer term at today’s record low rates.
Bank prime is 3.00%
The next meeting of the Bank of Canada is December 4, 2013.
P.S. If you, your family, or co-workers require guidance on current market trends, please call us, we are always available to help.
705-794-1283 or Cory@ndlc.ca
Mortgage Agent, FSCO # M09001239
Brokerage FSCO Lic. # 11764
Household imbalances keeping Bank of Canada from setting lower rates, analyst says
Last Updated: 30/10/13 6:27 PM ET
OTTAWA – It might have been a closer call than we thought.
After 18 months of telling consumers and markets that its key interest rate would eventually be lifted from 1%, close to rock bottom, the Bank of Canada shifted gears into neutral.
But it could just as easily have swung in the opposite direction, perhaps dropping 25 basis points, if the economic climate in Canada was more predictable.
“If it were not for the concerns about household imbalances, the BoC would have cut its policy rate at last week’s [policy] meeting,” says Nomura Securities economist Charles St-Arnaud.
Add to those concerns the fact that inflation is stubbornly at the low end of the bank’s 1-to-3% target range – 2% being the preferred level – and that the economy is growing at a disappointingly slow pace in the absence of stronger corporate investment, it looks like the 1% solution will be with us for a while yet.