In the world of mortgages, it’s been a week of rate cuts as lenders scramble to adjust to the significant drop in funding costs. One of the key indicators of fixed mortgage funding costs is the four-year swap rate, which has plummeted by 95 basis points since May 1. This sharp decline has brought it close to a two-year low, signaling that further decreases may be on the horizon.
This drop in funding costs has led to some attractive offers for borrowers. For instance, leading insured five-year fixed rates have recently hit a 16-month low of 4.29 per cent. True North Mortgage made headlines this week by slashing its insured two-year fixed rate to 4.99 per cent, appealing to borrowers who anticipate further declines in the prime rate over the next two years.
For insured borrowers seeking a longer-term mortgage solution, Nesto’s adjustable-rate mortgage at 5.40 per cent is currently the lowest floating rate in Canada. This option could be particularly advantageous if bond market projections hold true.
On the uninsured side, there have been no significant changes among the national rate leaders despite the cuts at other lenders. However, Pine Mortgage stands out with its three-year fixed rate at 4.94 per cent, the most economical uninsured fixed rate among national lenders. Additionally, their five-year fixed rate at 4.74 per cent is the best in the country.
Regional lenders may offer even lower rates depending on your province and preferred term. Butler Mortgage, for example, is offering a 5.75 uninsured variable rate in Alberta, B.C., and Ontario, which could be a compelling option for risk-tolerant borrowers.
It’s important to note that the top mortgage deals mentioned above are typically reserved for well-qualified borrowers and often come from online providers. For those with more complex mortgage needs, seeking guidance from an experienced mortgage advisor may be beneficial in the long run.
Robert McLister, a mortgage strategist and interest rate analyst, provides valuable insights into the mortgage market through his weekly column in the Financial Post. By staying informed about the latest trends and financing opportunities, borrowers can make more informed decisions about their mortgage options.
Overall, the current mortgage market offers a range of competitive rates for borrowers, with potential for further discounts in the coming weeks. By staying informed and seeking expert advice, borrowers can secure the best possible mortgage deal for their individual needs.