Concord cityplace condo . Mortgage rates may rise for the first time since the outbreak. Since the COVID-19 pandemic, many people did not expect that the real estate industry was the first to recover and become the brightest spot in the Canadian economy.Please Visit: Concord cityplace condo to Get Your VVIP Registration Today!
Both economists and industry insiders agree that the biggest driving force behind the extraordinary boom in the real estate industry is that mortgage rates are at an all-time low. However, the latest news is that five-year fixed mortgage rates are likely to rise as early as this week.
Canada’s Financial Post (Financial Post) reported today that five-year fixed mortgage rates have fallen by 100bp since the outbreak began. But lenders have warned in recent days that mortgage rates may have hit bottom “two weeks ago” and a rise in interest rates seems inevitable.
It is well known that five-year fixed interest rates are related to the yield on Canadian five-year bonds, and the yield on Canadian five-year bonds has soared from 0.394% to 0.48% in the past two days after media reports that the COVID-19 vaccine developed by Pfizer Inc.
The lenders have contacted them about raising interest rates. If yields on Canadian five-year bonds remain at current levels, these brokers believe banks or financial institutions will raise interest rates by an estimated 10 to 20 basis points by the end of the week.
James Laird, co-chief executive of Ratehub.ca and president of CanWise Financial, the mortgage brokerage, said: “lenders want to make sure that this is a permanent move towards stability. If bond yields remain near current levels, it will come as no surprise that you will see changes in mortgage rates later this week. “
Eisner, chief executive of True North Mortgage, another mortgage lender, told the Financial Post that the first change would take place in hidden special promotions. For promotional purposes, some smaller lenders usually offer discounts of 10 basis points, which are usually closed quickly within 30 days. He himself has heard that a number of such companies have warned that similar promotions may soon disappear.
Ron Butler, founder of Butler Mortgage, says he has seen interest rates hidden in high-end mortgage promotions of around 1 million yuan rise. The secret promotion rate for a five-year fixed mortgage of this size (offered only to the best customers two weeks ago, has the best credit rating and is willing to close within 30 days) is 1.59 per cent. Since then, he said, most large banks have raised interest rates on these mortgages to 1.64%, adding that interest rates may have hit bottom “two weeks ago.”
A 20 basis point increase in mortgage rates would increase the lowest cost for Canadian borrowers. He says, for example, that his company currently offers a five-year fixed interest rate of 1.35%. Therefore, for a mortgage loan of 500000 yuan, the monthly payment is 1966 yuan. If the interest rate is raised by 20 basis points, the monthly payment of the same mortgage will increase to 2012 yuan.
But this is only the case for now, and if the rise in bond yields heralds a shift in momentum, that will change and could lead to multiple interest rate hikes in the coming months.
