1. Current Interest Rates

• 5-Year Fixed Mortgages: As of today, rates for 5-year fixed mortgage products are starting around 4.5%. This represents a continuing trend of lower rates compared to previous months.
• 3-Year Fixed Mortgages: Rates for 3-year fixed products are slightly higher, ranging from 4.6% to 4.7%. This is an increase of about 10 to 20 basis points compared to the 5-year fixed products.
• 1 and 2-Year Fixed Mortgages: Shorter-term fixed mortgages, such as 1-year and 2-year terms, are currently priced in the mid to high 5% range. The exact rate can vary depending on the lender.
• Variable Mortgages: Following two recent cuts to the Bank of Canada’s overnight rate, variable mortgage rates are beginning around 5.7%.

2. Upcoming Bank of Canada Rate Meeting

• Date of Meeting: September 4, 2024.
• Expected Rate Change: The Bank of Canada is widely anticipated to lower the overnight rate by an additional 25 basis points, bringing it down to 4.25%.
• Impact on Prime Rate: This reduction is expected to decrease the prime rate to 6.45%.
• Effect on Bond Yields: Lower overnight rates are likely to exert downward pressure on bond yields, which could further reduce the pricing of fixed-rate mortgage products.

3. Current Mortgage Trends and Advice

• Popular Mortgage Choices:
  • Many borrowers are currently favoring short-term fixed products (3 years or less) due to the lower rates available.
  • There is also a notable resurgence in the popularity of variable-rate mortgages.
• Forecast and Trends: Forecasts suggest that the overnight rate could fall below 3% by the end of 2025. If this prediction holds true, variable mortgage rates could be lower than the lowest fixed rates available today by the end of next year.
• Types of Variable Mortgages:
  • Static Payment Variables: With this type, the payment amount remains unchanged despite fluctuations in interest rates.
  • Adjusting Payment Variables: Payments adjust when interest rates change. When rates fall, your monthly payment decreases, which can improve your cash flow. It is important to note that only some lenders offer this type of variable mortgage, so it’s essential to inquire about it before finalizing your mortgage commitment.

Need Assistance?

• Contact Information: For personalized advice or questions regarding your mortgage options, please contact:
  • Craig Van Dolder
  • Email: Craig@vandoldermortgages.com
  • Phone: 519-372-8524

Feel free to reach out for any mortgage-related queries or to explore how these updates might impact your current or future mortgage plans.