HSBC is once again setting the pace for uninsured five-year fixed rates. Its new 5.09-per-cent offer leads all national lenders. Plus it’s forking out up to $5,000 cash back, depending on mortgage size.
If you’re dead-set on a five-year fixed and there’s a meaningful chance you’ll break the mortgage early, find a lender with lower prepayment penalties than a bank. Mortgage brokers know who these lenders are.
In the one-year fixed market, note the dramatic savings for insured one-year rates versus uninsured rates. That’s largely thanks to much lower funding costs for government-backed insured mortgages where borrowers pay the default insurance premium.
QuestMortgage’s 4.64-per-cent insured one-year fixed remains one of the nation’s best values, especially since it includes legal and appraisal costs on standard mortgage switches from other lenders.
If you need an uninsured one-year rate, check with brokers, rate comparison websites and CANNEX. The latter includes good one-year rates from credit unions.
As for variable rates, next Wednesday we’ll hear from the Bank of Canada in what is expected to be its last rate hike of this cycle. If prime jumps another 25 basis points (bps) to 6.7 per cent, and that’s it, borrowers can consider themselves lucky. But folks walking a financial tightrope should prepare for even higher rates, just in case. (A basis point is 1/100th of a percentage point.)
What does that preparation entail? It means asking your lender how high your payment could go if rates jump another 50 to 100 bps, then confirming you have access to enough cash – via savings, borrowing or selling something – to cover the payment increase.
Rates are as of Jan. 19, 2023 from providers that 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 those 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.