Brokers are starting to see an uptick in the number of clients looking for rate holds after several lenders pushed select VRMs further into plus-prime territory, a broker channel player among them.
“I think we’ll see an increase in the number of clients looking for 120-day rate holds, which won’t get them all the way to spring, but close,” Harold Hagen, an agent with Verico MyMortgage.ca Inc.in Calgary, told MortgageBrokerNews.ca. “People are reactionary, and they’ll want to see what they can do to stabilize future uncertainty because of the rate changes.”
Effective Tuesday, rates on some RBC variable mortgages – as well as its five-year fixed – rose by 10 basis points.Its five-year open variable shot up 30 bps to prime + 1.00 per cent.
Its five-year closed rate now sits at 5.29 per cent. CIBC also edged its five-year rates up a tenth of a point to that same 5.29 per cent.
Leading a variable rate climb for the broker channel, FirstLine Mortgages shot through the prime barrier Friday, setting one of its own VRMs at prime +0.05 per cent.
More lenders since followed the lead of the big banks, at least on fixed rates, given movement in the bond market late last week. Those gains reflect the surprisingly positive job numbers in the U.S., which added 103,000 jobs last month – more than twice what most economists had predicted.
That rosier picture actually increased borrowing costs for lenders, both in and outside the broker channel, with economic growth forecasts putting upward pressure on rates in the bond market.
This week’s rate hikes may encourage a number of preapproved borrowers into the market, although a dearth of properties for sale in some markets may block their willingness to move to closing.
It’s why Hagen and others are anticipating a number of clients will look to lock into today’s rates, in hopes of being able to access them early next year as sellers enter the early spring market.