With so much unknown in our economy and real estate markets, there is one sure thing - interest rates are on the move upwards. Well, Fixed rates at least.

Variable rates remain at all-time lows. Fixed rates have increased by approximately 40 basis points over the last couple of weeks.

Variable rates are holding firm and we’ve been told publicly from the BoC that they won’t look at the increase until 2023.  Time will tell if that will play out but for them to come with that strong of wording speaks volumes.

What does that mean for variable rates?

Variable-rate discounts remain low and look to be getting ever better.  When you factor in the low discounts with the low prime lending rate, variable rates are very attractive.  If we believe the BoC, the Prime lending rate of 2.45% will remain the same until 2023 but the discounts the lenders offer may change.  

If you have a variable rate mortgage, you either have a discount or a premium added to this rate.  Ie. Prime (2.45%) less 1% (discount rate) = 1.45%.  If you have a premium added to that prime rate then we need to talk because there is an opportunity to save some money.

As the BoC moves the Prime lending rate, your discount stays locked in for the term (typically 5 years).  So if the Prime lending rate moves to 2.70% and your variable discount is 1%, your new interest rate is 1.70%.

If you want to secure a fixed rate before they increase even more, please reach out to lock in a rate hold.

If you want to see if we can save you money on your current variable rate mortgage, please let us know and we’ll run some numbers to see if it makes sense.

Either way, we as Canadians are in a great spot from a mortgage rate perspective. Money is still cheap and it will be for the foreseeable future.