Variable mortgage deals down despite rate cut expectation

By
Millicent Wong
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0
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Variable rate borrowers are counting down the minutes until the Bank of Canada's expected rate cut next Wednesday. Markets are betting on a quarter-point cut in Canada's key interest rate. This means that the key interest rate is likely to fall to 5.70 percent for the first time in more than two years.

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That's the good news.

The bad news is that Prime's leading variable rate discounts are shrinking. In other words, the banks that finance most adjustable-rate mortgages are clawing back some of their profit margin after months of harsh pricing.

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However, borrowers can still find some attractive terms with terms of three years. We're talking a low to mid range of four percent. These three-year terms currently remain the fixed-price favorite.

Last but not least, if you dream of securing a cheap two-year corporate contract, you may want to postpone that dream. The lowest two-year promotional rates are no longer available, and the uninsured option is up 115 basis points compared to last week.

Here are all of the week's trends among national lenders:

Two-year fixed term (uninsured): +115 basis points
Three-year fixed term (uninsured): +10 basis points
Five-year fixed term (uninsured): -15 basis points
Five-year variable (uninsured): +15 basis points
Two-year fixed term (insured): +35 basis points
Four-year fixed term (insured): -4 basis points
Five-year fixed term (insured): -5 basis points

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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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