A fixed-rate mortgage today can go for as low as 1.64%, but the current rate environment is introducing significant industry risks as prospective borrowers are constantly on the hunt for ever-lower rates, according to RateSpy data.
As of July 2, intelliMortgage and Butler Mortgage posted 1.64% for their one-year fixed-rate products, and a similar record low of 1.68% for their five-year variable-rate offerings.
These trends will likely last for the foreseeable future considering the prolonged impact of the COVID-19 pandemic, observers said.
“Canadians can expect fixed and variable rates to stay at their current historic low until the Canadian and world economy is close to fully recovered,” said James Laird, co-founder of Ratehub.ca and president of CanWise Financial. “When we start seeing good economic news and good news related to COVID-19 consumers should expect mortgage rates to start to rise at that point.”
This came with the increasing usage of rate comparison sites over the last few months.
“Pre-COVID, Canadians were already shifting to online sources to research mortgage rates and educate themselves. However, many still preferred in-person interaction before closing their mortgage,” Laird said. “COVID-19 has forced Canadians to complete the process without that in-person appointment. Most have been surprised and impressed with the efficiency and level of service available without requiring an in-person meeting.”