A look at the lowest available mortgage rates on fixed and variable terms and HELOCs this weekTRAVIS DOVE/The New York Times News Service
More Canadian mortgagors may throw in the towel
If real-time GDP estimates from the Atlanta Federal Reserve are remotely accurate, economists better reach for their inhalers. Third-quarter GDP projections just came in at a shockingly high 5.8 per cent, enough to take your breath away.
Actual GDP will almost certainly come in lower than 5.8 per cent, but U.S. economic growth nonetheless seems to be accelerating. That’s partly why bond yields are hitting multidecade highs.
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CanDeal DNA’s CORRA Forecast Curve, which reflects market rate expectations, is pricing roughly a 90-per-cent chance of another rate hike this year or next. That would take Canada’s benchmark prime rate up to 7.45 per cent, five percentage points above where we were 18 months ago.
Even the hint of more hikes will make some borrowers throw in the towel and lock in at this point. That may be an unfortunate decision if we’re truly near the top of the rate cycle as economists and the market expect, but there’s just no way to know for sure.
Folks who want to lock in are watching rates run away from them. As we speak, the hottest mortgage term is the three-year fixed. By the time you’re reading this there may be no uninsured three-year fixed rates left from national lenders.
If you’re in B.C. or Manitoba, there’s a bunch of credit unions still offering rates below 6 per cent on three-year terms. If you need an insured mortgage, check brokers and online-only lenders as they typically rule the roost on insured rates, and several are below 6 per cent.
Rates were sourced from the MortgageLogic.news Canadian Mortgage Rate Survey on Aug. 17, 2023. We include only providers who advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20 per cent down payment or switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1 million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.
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Robert McLister