A look at this week’s available mortgage rates on fixed and variable terms and HELOCs following the collapse of Silicon Valley Bank.Sean Kilpatrick/The Canadian Press
Mortgage rates could go on sale
When you’re near the presumed top of a rate hike cycle, five-year fixed rates are historically a poor play. But many folks want maximum protection anyway, in the unlikely event inflation makes new highs, and takes rates with it.
If you’re purchasing a home or switching lenders, and you want or need to limit payment risk, look at MCAP’s new four-year special. Its rate leads the country at 4.64 per cent for those who meet default insurer guidelines and are putting down less than 20 per cent, or more than 35 per cent.
McLister: Mortgage specials start arriving, just in time for spring
Despite the big dive in bond yields, however, it might take somewhat longer than expected before rates fall significantly, at least industrywide.
“Lenders and [mortgage investors] will likely want to see that markets, [risk] spreads and yields are stable before dropping mortgage rates,” said Blake Dumelie, vice-president of capital markets at nesto.
And on the variable-rate side, we might even see slightly higher rates. That’s common during periods of perceived risk in the banking system.
“With credit spreads widening, there is upward pressure” on floating rates, Mr. Dumelie says. Already this month, multiple lenders have shrunk their discounts from prime rate on such mortgages.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.