Long-term Treasury yields rose this week to their highest level in more than two months, but mortgage prices were little moved.
We've only seen two changes to the national fare leaderboard:
- The leading two-year fixed rate with default insurance rose 20 basis points to 3.99 percent
- The fail-safe three-year fixed rate fell five basis points to 3.84 percent
The top performers in fixed interest rates advertised nationwide remain 3.69 percent insured (a five-year term from Nesto) and 3.83 percent (a three-year term from Citadel Mortgages).
On the variable side, Ontarions can secure 3.39 percent at Ratebuzz.ca, and 3.45 percent is available nationally at Nesto.
But unless lenders increase their base rate discounts, the days of further variable savings could be numbered. Forward interest rate data from CanDeal DNA shows markets are just a third of the way to pricing in another rate cut from the Bank of Canada next year.
When it comes to getting approved, the six-month fixed-rate mortgage is the easiest to qualify for. This is due to the federal mortgage stress test, which forces people to qualify for the higher rate of 5.25 percent or their contract rate plus 200 basis points.
Six-month interest rates from lenders like True North Mortgage and Marathon Mortgage are currently just 2.49 to 2.99 percent. These rates allow borrowers to qualify at a more affordable rate of 5.25 percent, up from 5.69 percent for the leading fixed rate.
In other words, these short-term solutions allow you to afford more house for the same salary. Of course, there's the inevitable catch: you'll have to renew with the same lender after six months or pay a fee of more than one percent.
And assuming interest rate risk to maximize purchasing power isn't the way to go for most borrowers. These solutions are more intended for people who expect a short-term improvement in income.
Speaking of True North Mortgage, we hear they'll be introducing a two-year, 3.59 percent mortgage for Black Friday next week. This applies to purchases and exchanges from other lenders, but you must have (or take out) default insurance.
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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