Interest Rates on the Rise, time to Buy!
Although rates having been decreasing over the past several months, it now looks like fixed rates are back on the rise. With the Government of Canada’s 5 year benchmark bond yield rate rising almost .25% on Friday, Royal Bank has taken a proactive approach and raised their 5 year fixed rate .35 basis points to 5.84% (this is a posted rate, not discounted). Although we don’t know how this is going to play out with the remaining banks and mortgage companies, one mortgage company has increased their 5 year discounted rate from 3.99% to 4.45% today. This significant increase in the bond rates has definitely put pressure on the remaining lenders to follow suit and we believe they will increase their fixed rates either today or tomorrow.Saying this, we expect the variable rate to stay stable for at least the remainder of this year and possibly mid 2010 or longer. So if you are currently floating with Prime and are concerned about rising fixed term rates, this may be the time you consider locking into a fixed rate.