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Fixed Mortgage Rates went down, but for how long?

I'm excited to share some exciting news fixed mortgage rates have decreased from their recent highs, providing a great opportunity for homebuyers.

Currently, the best rates for insured files (where the borrower is paying CMHC insurance) are at 4.95%. For non-insured files, the best rates starts at 5.09% but many conditions applies. These rates are significantly lower than the highs we saw last year, making it a more affordable time to purchase a home.

For those who are unfamiliar, CMHC insurance is a type of mortgage insurance that protects the lender in case the borrower defaults on the loan. It is typically required for borrowers who have less than a 20% down payment. 

It's worth noting that Canadian bond rates are on the rise (see below link), suggesting that the current low mortgage rates may not last for much longer. Therefore, it's crucial to act quickly if you're considering buying a home. Getting pre-approved for a mortgage now will give you a better idea of how much you can afford to borrow and will strengthen your position when making an offer on a home.

On the other hand, variable mortgage rates have remained stable recently. There's still potential for them to go down later this year if the inflation trajectory continues its downward trend Inflation was down to 2.9% for January from 3.1%. Variable rates are 1 to 1.5% above fixed rate for a similar mortgage. This is an historical anomaly. Normally, variable and fixed rates are less than 0.5% (up or down) from each other. The next Bank of Canada meeting will be on Wednesday, March 06. At this meeting it is expected that rates will remain at the current levels. The most likely rate reduction from the Bank of Canada should start around June or July meetings. 

If you're thinking about buying a home, now is a great time to take advantage of these low rates. With a fixed-rate mortgage, you'll have the peace of mind knowing that your monthly payments will stay the same for your term, regardless of how interest rates fluctuate in the future.

Here are a few tips for getting started with the mortgage process:

  1. Figure out how much you can afford: Before you start shopping for a home, it's important to figure out how much you can afford to spend. This will help you narrow down your search and make the home-buying process more efficient.

  2. Get pre-approved for a mortgage: Getting pre-approved for a mortgage is a great way to show sellers that you're a serious buyer. It also gives you a better idea of how much you can afford to borrow.

  3. Find the right home: Once you know how much you can afford, it's time to start looking for a home. Be sure to take your time and find a home that's the right fit for your needs and budget.

  4. Make an offer: When you find a home you want to buy, it's time to make an offer. Be sure to work with your real estate agent to make a competitive offer.

  5. Close: This is when the title transfers to you and all the documents are signed. You will then receive your keys and move in!

All those steps start with a phone call or with an appointment. 

If you have any questions about the mortgage process or current mortgage rates, please don't hesitate to contact me. I'm here to help you make your homeownership dreams a reality.

Simon Bilodeau

Mortgage broker

DLC-Mortgage Negociators


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