The world seems so uncertain, with trade wars, actual wars, violent protests, and world leaders having to google what the word “ally” means.
In the bond market, which largely determines fixed-rate mortgage rates, uncertainty typically leads investors to seek additional risk premiums, also known as risk premiums. These, in turn, flow directly into the fixed mortgage rates that borrowers see.
So far, however, this global concern has not resulted in mortgage pricing frustration. Lenders’ fixed rate discounts were surprisingly generous compared to their financing costs.
This “tight spread” environment helps online lenders offer as little as 3.69 percent on insured fixed-rate mortgages (see Butler Mortgage and RateBuzz).
On the variable side, certain provinces (like Ontario) offer deals as low as 3.39 percent (insured) and 3.70 percent (uninsured).
Of course, it’s not like the “old days” (2021), when insurance premiums reached record lows of 1.23 percent fixed and 0.85 percent variable.
Still, we should be thankful that mortgage spreads aren’t behaving more normally, because if they were, interest rates in the triple range might already be in the past tense.
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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