Variable-rate borrowers across the country experienced a quiet fisticuffs following yesterday's quarter-percentage cut by the Bank of Canada.
For the average borrower, this 25 basis point discount from the benchmark prime rate translates into approximately $13 to $20 in monthly payment savings per $100,000 borrowed, depending on the loan type.
Due to this generosity from our central bank, the lowest nationally announced variables today fell to 3.89 percent (uninsured) and 3.45 percent (insured). However, as most lenders have not yet adjusted their variable interest rates, prices are expected to improve by next week.
If you find gambling with variable interest rates too exciting, fixed interest rates have also come down. The lowest national figure is 3.69 percent for an insured five-year term with True North Mortgage and 3.95 percent in Ontario for the uninsured option (from Ratebuzz.ca).
On the other hand, if you feel like you're giving up your personal freedom for half a decade, the interest rates will also go down for three years. Citadel Mortgage advertises 3.84 percent (uninsured) in most provinces, while Butler Mortgage is at 3.69 percent (insured) – but only in Alberta, BC and Ontario.
If you prefer an especially short term, True North is also offering a new 3.79 percent offer for insured two-year borrowers.
Given all the unknowns – trade wars, inflation, recession risk, rising government debt and geopolitical instability – some would prefer to split the difference and avoid the fixed vs. floating coin toss. For these people, some of the larger banks sell hybrid mortgages – half fixed, half variable. With an effective interest rate of 3.99 percent or less, hybrid bonds are perfect for those who enjoy financial stability with a light touch.
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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