Lower rates appear to be working their market magic, slowly

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This week you'll find lower interest rates if you're looking to take out a short-term mortgage, but don't pop the champagne just yet. The leading nationally advertised uninsured rates fell by just five to nine basis points for one-, two- and three-year fixed-rate mortgages.

These 12- and 24-month loans are still too expensive to pick up a flyer, but leading three-year rates of 4.64 percent (uninsured) or less perform quite well in rate simulations based on the bond market's interest rate outlook.

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With markets betting on major rate cuts next year, the variable mortgage is still expected to be the frontrunner in borrowing costs over the next five years. The variable interest rates for the uninsured are in the low five percent range, for the insured they are 4.70 percent and more. Plus, they all come with a free rate lock feature – think of this as your financial panic room in case inflation gets too high again.

All told, average fixed mortgage rates are down about 150 basis points compared to last year. That helps more borrowers qualify for a mortgage and undercuts real estate prices, with the exception of the GTA condo market, where prices are defying gravity — in the wrong direction.

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According to preliminary estimates from real estate website Wahi.com, average property prices in the GTA rose around one percent year-on-year and month-on-month in October. The company expects sales to be up about 20 percent compared to last October. So lower rates work, but the magician takes his time.

Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.

Mortgage interest rates

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