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Fixed mortgage rates are on the decline. Is now the time to lock in? – Global News

Published

8 months ago

January 13, 2024

Rates on some fixed mortgages have dropped by a full percentage point in the past few months, opening up an opportunity for Canadians eyeing the spring housing market or with a mortgage of their own up for renewal.

While experts say there’s little downside to securing a cheaper rate today, committing to a long-term mortgage with rate cuts in the forecast might end up costing some households more.

Before the end of 2023, the lowest rate available on insurable five-year fixed rate mortgages dropped below five per cent, the first time it fell below that benchmark since last spring.

As of Thursday, rates as low as 4.84 per cent were available for that same product at multiple Canadian lenders, according to James Laird, co-CEO of Ratehub.ca.

That’s down more than a percentage point from highs seen last fall, Laird tells Global News.

Click to play video: 'Navigating the Mortgage Minefield: Insights on Canada’s looming interest shock'

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Navigating the Mortgage Minefield: Insights on Canada’s looming interest shock

Since late October, there’s been a shift in sentiment within the bond market that informs what rates banks offer on mortgages and other loans, he says.

As the Canadian economy has weakened and inflation has shown signs of cooling, forecasters are shifting their expectations for the Bank of Canada’s policy rate from “higher for longer” to now thinking “rate cuts are coming sooner rather than later,” Laird says.

That’s driven down yields on products like the government of Canada’s five-year bond in recent months — the key benchmark for fixed-rate mortgages of the same length.

The popular five-year fixed product is not the only mortgage seeing cheaper rates to start the new year. Mortgage Outlet COO and broker Leah Zlatkin notes that three-year fixed mortgages are also down from recent highs, floating just above the five-per cent market.

“It is a really good time to get a lower (fixed) interest rate than you would’ve been getting for the last year,” she tells Global News.

Falling rates spurs ‘deja vu’ from 2023

But Zlatkin also warns that there are risks out there that could “quell” the easing in the bond market.

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Because yields — and by extension, fixed mortgage rates — are tied to expectations for the Bank of Canada’s policy rate, anything that pushes back forecasts for eventual rate cuts could send fixed rates in the market back up.

Inflation could stay elevated, for example, keeping the central bank from easing rates. Such a move would limit activity in the housing market as fewer people qualify for rates they can afford, Zlatkin says.

Laird says the easing in the bond market today is “almost deja vu” from last year, when the Bank of Canada announced a “conditional pause” in its rate hike cycle.

Click to play video: 'Business Matters: Canada’s housing market will return to near ‘normal’ in 2024, Royal LePage suggests'

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Business Matters: Canada’s housing market will return to near ‘normal’ in 2024, Royal LePage suggests

At that time, market watchers began to speculate that rate cuts were on the horizon, bringing down yields and fuelling a spring thaw in the cooling housing market. But those hopes were cut short in June and July when the Bank of Canada returned with back-to-back rate hikes, and the bond market saw yields surge soon after on the “higher for longer” mentality.

Laird warns that any number of global events or inflation snags not yet in the forecasts could affect the Bank of Canada’s timeline for rate cuts.

For that reason, there’s “never a downside” for Canadians who are thinking about getting a mortgage for the first time, or who have one coming up for renewal in the months ahead, to get a rate hold now when the market is easing.

By inquiring with a mortgage professional, you can secure a rate at today’s prices, typically for 120 days in advance of when you need it. If bond yields continue to ease and rates drop further, you can take advantage of the new rates right up until you sign for the new mortgage; if the trend reverses and rates rise, you’re similarly protected, Laird notes.

“It’s a free insurance policy,” he says.

How to secure the most competitive rate

The 4.84 per cent rate available on most comparator sites is open largely to homeowners or buyers with an insurable mortgage, Laird says, where lenders can afford to offer the most competitive rates.

Zlatkin says that for those with mortgages up for renewal in the first half of 2024, now is the time to get documents in order and reach out to a broker or other professional to kick off the renewal process.

An existing lender is likely to offer a competitive five-year fixed rate at renewal, but will be more inclined to negotiate a lower rate if you’re working with a broker to put another offer on the table, she says.

There’s another option for mortgage consumers to consider, Zlatkin notes. Variable-rate mortgages are currently more expensive than most fixed-rate options, as they’re tied to lenders’ prime rate, which itself is informed by movements in the Bank of Canada’s policy rate.

Currently, five-year variable rate options are priced around 6.2-6.7 per cent, Zlatkin says. But if forecasts are to be trusted that the central bank rate is going to decline, those with a variable mortgage could see their rate drop in concert with those cuts.

Click to play video: '2.2M mortgage holders will face ‘interest rate shock’ in next 2 years: CMHC'

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2.2M mortgage holders will face ‘interest rate shock’ in next 2 years: CMHC

Depending on the type of payments involved in their mortgage, a household could see their payments start higher but drop as the rate cycle eases if they were to take out a variable rate.

There are plenty of risks that come with this approach — as happened last year, rates could still rise rather than decline in the year to come — but Zlatkin notes that if rate cuts do materialize, a variable rate holder could pay less than someone with a fixed rate over the same timeframe.

“Consumers in the marketplace should start pricing that into their considerations,” she says.

Laird says that based on activity on Ratehub’s mortgage pricing and leads tools, there seems to be “early” interest among buyers ahead of the traditionally busy spring housing market.

Coming off of a very cool winter season, which saw few active buyers and some would-be sellers forced to shelve their plans for the new year, Laird predicts the housing market is due for a “strong start to the year.”

“There should be a lot of pent-up demand, just because there weren’t a lot of transactions last year,” he says.

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Langford, Heim lead Rangers to wild 13-8 win over Blue Jays

Published

9 hours ago

September 17, 2024

Anne Joseph

ARLINGTON, Texas (AP) — Rookie Wyatt Langford homered, doubled twice and became the first Texas player this season to reach base five times, struggling Jonah Heim delivered a two-run single to break a sixth-inning tie and the Rangers beat the Toronto Blue Jays 13-8 on Tuesday night.

Leody Taveras also had a homer among his three hits for the Rangers.

Langford, who also walked twice, has 12 homers and 25 doubles this season. He is hitting .345 in September.

“I think it’s really important to finish on a strong note,” Langford said. “I’m just going to keep trying to do that.”

Heim was 1-for-34 in September before he lined a single to right field off Tommy Nance (0-2) to score Adolis García and Nathaniel Lowe, giving Texas a 9-7 lead. Heim went to the plate hitting .212 with 53 RBIs after being voted an All-Star starter last season with a career-best 95 RBIs. He added a double in the eighth ahead of Taveras’ homer during a three-run inning.

Texas had 13 hits and left 13 men on. It was the Rangers’ highest-scoring game since a 15-8 win at Oakland on May 7.

Matt Festa (5-1) pitched 1 1/3 scoreless innings to earn the win, giving him a 5-0 record in 13 appearances with the Rangers after being granted free agency by the New York Mets on July 7.

Nathan Eovaldi, a star of Texas’ 2023 run to the franchise’s first World Series championship, had his worst start of the year in what could have been his final home start with the Rangers. Eovaldi, who will be a free agent next season, allowed 11 hits (the most of his two seasons with Texas) and seven runs (tied for the most).

“I felt like early in the game they just had a few hits that found the holes, a few first-pitch base hits,” said Eovaldi, who is vested for a $20 million player option with Texas for 2025. “I think at the end of the day I just need to do a better job of executing my pitches.”

Eovaldi took a 7-3 lead into the fifth inning after the Rangers scored five unearned runs in the fourth. The Jays then scored four runs to knock out Eovaldi after 4 2/3 innings.

Six of the seven runs scored against Toronto starter Chris Bassitt in 3 2/3 innings were unearned. Bassitt had a throwing error during Texas’ two-run third inning.

“We didn’t help ourselves defensively, taking care of the ball to secure some outs,” Blue Jays manager John Schneider said.

The Blue Jays’ Vladimir Guerrero Jr. had a double and two singles, his most hits in a game since having four on Sept. 3. Guerrero is hitting .384 since the All-Star break.

TRAINER’S ROOM

Blue Jays: SS Bo Bichette (calf) was activated and played for the first time since July 19, going 2 for 5 with an RBI. … OF Daulton Varsho (shoulder) was placed on the 10-day injured list and will have rotator cuff surgery … INF Will Wagner (knee inflammation) was placed on the 60-day list.

UP NEXT

Rangers: LHP Chad Bradford (5-3, 3.97 ERA) will pitch Wednesday night’s game on extended five days’ rest after allowing career highs in hits (nine), runs (eight) and home runs (three) in 3 2/3 innings losing at Arizona on Sept. 14.

Blue Jays: RHP Bowden Francis (8-4, 3.50) has had two no-hitters get away in the ninth inning this season, including in his previous start against the New York Mets on Sept. 11. Francis is the first major-leaguer to have that happen since Rangers Hall of Famer Nolan Ryan in 1989.

—

AP MLB:

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Billie Jean King set to earn another honor with the Congressional Gold Medal

Published

10 hours ago

September 17, 2024

Anne Joseph

WASHINGTON (AP) — Billie Jean King will become the first individual female athlete to be awarded the Congressional Gold Medal.

Reps. Brian Fitzpatrick of Pennsylvania and Mikie Sherrill of New Jersey announced Tuesday that their bipartisan legislation had passed the House of Representatives and would be sent to President Joe Biden for his signature.

The bill to honor King, the tennis Hall of Famer and activist, had already passed unanimously in the Senate.

Sherrill, a Democrat, said in a statement that King’s “lifetime of advocacy and hard work changed the landscape for women and girls on the court, in the classroom, and the workplace.”

The bill was introduced last September on the 50th anniversary of King’s victory over Bobby Riggs in the “Battle of the Sexes,” still the most-watched tennis match of all-time. The medal, awarded by Congress for distinguished achievements and contributions to society, has previously been given to athletes including baseball players Jackie Robinson and Roberto Clemente, and golfers Jack Nicklaus, Byron Nelson and Arnold Palmer.

King had already been awarded the Presidential Medal of Freedom in 2009. Fitzpatrick, a Republican, says she has “broken barriers, led uncharted paths, and inspired countless people to stand proudly with courage and conviction in the fight for what is right.”

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Account tweaks for young Instagram users ‘minimum’ expected by B.C., David Eby says

Published

10 hours ago

September 17, 2024

Anne Joseph

SURREY, B.C. – Premier David Eby says new account control measures for young Instagram users introduced Tuesday by social media giant Meta are the “minimum” expected of tech companies to keep kids safe online.

The parent company of Instagram says users in Canada and elsewhere under 18 will have their accounts set to private by default starting Tuesday, restricting who can send messages, among other parental controls and settings.

Speaking at an unrelated event Tuesday, Eby says the province began talks with social media companies after threatening legislation that would put big tech companies on the hook for “significant potential damages” if they were found negligent in failing to keep kids safe from online predators.

Eby says the case of Carson Cleland, a 12-year-old from Prince George, B.C., who took his own life last year after being targeted by a predator on Snapchat, was “horrific and totally preventable.”

He says social media apps are “nothing special,” and should be held to the same child safety standards as anyone who operates a place that invites young people, whether it’s an amusement park, a playground or an online platform.

In a progress report released Tuesday about the province’s engagement with big tech companies including Google, Meta, TikTok, Spapchat and X, formerly known as Twitter, the provincial government says the companies are implementing changes, including a “trusted flagger” option to quickly remove intimate images.

— With files from The Associated Press

This report by The Canadian Press was first published Sept. 17, 2024

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