A look at the lowest available mortgage rates on fixed and variable terms and HELOCs this weekGene J. Puskar/The Associated Press
Unpredictable Rate Environment Drives Three-Year Fixed Market
Almost every leading one- to five-year fixed rate rose ten or more basis points this week. (One basis point is one-one hundredth of a percentage point.)
Government bond yields, which lead fixed mortgage rates, have ridden a steady incline for almost two months. The drivers are bafflingly strong economic data and expectations of more central bank rate hikes.
McLister: Canada does not have a mortgage amortization crisis
Where the action is
Lenders and mortgage brokers are seeing heavy mortgage interest in the three-year space. Many folks have given up trying to make sense of rate direction, so they’re happy to straddle the fence for a few years.
A three-year fixed gives them more security than a short term but less commitment and prepayment penalty risk than a long term.
Three-year terms don’t project to have the lowest borrowing cost on paper—based on market rate expectations—but mental comfort is often worth a small premium. Moreover, rate expectations are like West Coast weather forecasts—not overly reliable.
Rates are as of June 29, 2023, from providers that advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20 per cent down payment, or those switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1-million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.