• We at Robert Floris’s  Hamilton office continually monitor interest rates. We strongly believe low rates will be here for a while. What concerns us is affordability will eventually be squeezed as prices rise but incomes do not. Companies continue to refinance to take advantage of these historic rates. Mortgage consumers should as well. Take advantage of these bottom end  rates as they will not last forever. Another mortgage broker wrote a fine article which l would love to share.

    record low rates This isn’t 2010, 11, 12, 13 or even 2014…  It’s 2015, and once again, we are making this announcement.  5 year Fixed Mortgage rates are an new all-time lows!  Today, you can get a 5 yr fixed rate for 2.79%, even 2.74%, with some conditions.  (and by the way, yes, I am seeing slightly lower rates advertised, and I have access to these, but I won’t recommend these to my clients as they contain inferior terms, limited privileges, product restrictions and inflated prepayment penalty calculations… I won’t promote these.)

    Just 2 years ago, the Federal Minister of Finance’s office picked up the phone, and called a Bank because they were advertising a 5 yr fixed rate at 2.99%.    The federal govt was concerned that the record low rate, at the time, would promote more consumer spending and make the already hot real estate market, even hotter.

    Fast forward to today.  We are seeing a bigger spread between what the BIG SIX BANKS are advertising and what Mortgage Brokers can offer..  The spread is now 0.25%.  On a mortgage, this is more than enough reason to shop!  And there’s something else a little different this time.  Consumer confidence isn’t as high as it was 2 yrs ago.  This may be why the Bank of Canada governor lowered the Target Rate last month.  (a move that surprised everyone, well not me or my readers).

    Looking at today’s bond yields, there is actually room for fixed rates to drop further.  Seems hard to believe.  But I wouldn’t hold my breath.  We’ve reached new lows..and going lower will only happen if we see more negative economic news over an extended period of time.

    How low can they go?   Well, you can’t go below 0%.  Just kidding… but seriously, they may go a bit lower but we can probably expect the usual increase after the traditional Spring real estate market is over.

    My advice is to speak with an unbiased Mortgage Professional.  Speak with an experienced Mortgage Broker to get a clear picture of what your best options are.

    Robert Floris is an independent mortgage broker with Mortgage Architects in Hamilton Ontario

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