A look at the lowest available mortgage rates on fixed and variable terms and HELOCs this weekANDREW CABALLERO-REYNOLDS/AFP/Getty Images
Mortgagors’ three-year love affair continues
If mortgage terms were a popularity contest, the three-year would get first prize. People are flocking to these middle-of-the-road terms for three main reasons:
One: A belief that rates will fall after the Bank of Canada finishes its war on inflation and starts to ratchet rates down – which makes people want to avoid being trapped in high five-year fixed rates;
Two: Uncertainty about when rates will fall;
Three: A desire to avoid the sometimes onerous prepayment penalties characteristic of five-year fixed mortgages.
McLister: Buying insurance you don’t need can save money on your mortgage
Speaking of the Bank of Canada, the bond market is pricing in almost 100 basis points of rate cuts within two years, according to CanDeal DNA’s CORRA Forecast Curve. But until inflation is back in the 2-per-cent range, the market’s rate expectations will remain as fickle as a weather vane in a windstorm.
If you decide to hop on a three-year, you’ll currently pay over 6 per cent (uninsured) or just under 6 per cent (insured). That’s quite a departure from 24 months ago when you could snag one for 1.99 per cent or less.
And for those who are curious, the lowest rate in the country is a phenomenal 4.59 per cent – 40 basis points below the next closest competitor. Vancouver-based Community Savings Credit Union offers it on insured five-year fixed mortgages. It’s a full-frills mortgage – meaning it has no onerous restrictions and has all the typical perks – available to insured borrowers throughout B.C., on both purchases and lender transfers.