With U.S. trade threats via Canada, it’s hard to find anyone overly enthusiastic about our macroeconomic outlook.
Economists are expecting a gigantic jump in Canada’s GDP when it falls Friday morning. And when it comes to growth, someone once sang, “Zero is the loneliest number you’ll ever make.”
Yet markets are still pricing in a two-in-three chance that the Bank of Canada will make further rate cuts this year.
This has made variable interest rates popular with many people. Among others, these intrepid borrowers:
- Assume that the key interest rate will not rise for several quarters
- For example, the lower prepayment penalties compared to fixed interest rates
- For example, the fact that variables are initially cheaper
Currently, the best advertised nationwide offerings have preferred variable over fixed loans by 20 to 22 basis points, depending on whether the mortgage is insured or uninsured.
Across national lenders, we saw several rate cuts this week, including a five basis point cut in Nesto’s five-year insured fixed rate (now 3.64 per cent).
The real fireworks are with regional lenders, where Ontario-based Ratebuzz cut its lowest insured fixed rate to 3.48 per cent. The variable also fell to a national-leading 3.29 percent.
Consider it another reminder that small online mortgage shops tend to try harder.
Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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