Mortgage rates in free fall
July 13, 2020
Canadian mortgage rates are in a virtual free fall, dropping to record-setting lows with discount brokers now offering one to five-year fixed rates in the 1.64 to 1.68 per cent range.
HSBC Canada led the trend earlier this month when it announced a 5-year fixed default-insured mortgage for 1.99 per cent—the lowest rate ever for a 5-year fixed at the time.
Days later, multiple brokers were offering 5-year fixed rates starting at 1.98 per cent, and even lower in some cases, with restrictive conditions.
The lowest fixed mortgage rate available as of July 2, according to rate comparison website RateSpy.com, was the 1-year fixed at 1.69 per cent (for those putting down less than 20 per cent for insured mortgages).
Even the 10-year fixed rate is reaching new lows, currently available nationally as low as 2.84 per cent.
“Fixed rates are dirt cheap because funding costs keep sliding,” RateSpy founder Rob McLister said. “With a bearish economic report or two, we could slide further into uncharted depths, as soon as next month.”
The lowest nationally available floating rate is currently 1.95 per cent (prime minus 0.50 per cent), although certain discount brokers are offering rates as low as 1.69 per cent for default-insured mortgages.
As of July 2, intelliMortgage and Butler Mortgage posted 1.64 per cent for their 1-year fixed-rate products, and a similar record low of 1.68 per cent for their 5-year variable-rate offerings.
“Canadians can expect fixed and variable rates to stay at their current historic low until the Canadian and world economy is close to fully recovered,” said James Laird, co-founder of Ratehub.ca and president of CanWise Financial.