Oil prices have climbed back above the $100 threshold set by the Bank of Canada in last month’s Monetary Policy Report.
The longer the price of crude oil stays in the triple digits, the greater the chance that mortgage rates and the base rate for a trip north will collapse.
And yet about four in 10 borrowers have embraced variable interest rates, apparently unconvinced that oil-fueled inflation will continue.
By historical standards, the best variable interest rates are still disappointing, at least if you don’t have default insurance.
Citadel Mortgage leads the advertised uninsured market with a prime offer of minus 0.76 percent (3.69 percent).
Alternatively, variable rate borrowers can save about 34 basis points on the interest rate by purchasing default insurance.
For those who believe this recent rise in inflation will be short-lived, True North Mortgage is now offering two-year insurance rates at just 3.99 percent or 4.49 percent for one year. Both top all national lenders
However, the public favorite is currently still three-year fixed interest rates. The leaders there are around four percent, plus or minus.
If you’re shopping at a fixed price, the clock may not be on your side. Decide on a rate lock early because if the five-year Canadian government bond yield closes above around 3.33 percent, fixed rates could rise again.
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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