From a previous low of 2.49%, the best available 5-year fixed rate on Ratehub.ca has shrunken further to 2.39%, the site reported late last week.
The last time 5-year fixed rates were in a similar level was back in July 2017, “with the spread between fixed and variable rates further increasing by 22 basis points.”
In 2019 alone, fixed rates have dropped by 0.8%, the site added.
“Most borrowers considering their mortgage options today should choose a fixed rate in order to lock in one of the lowest fixed rates we’ve seen in recent years. Fixed rates also provide a level of payment certainty over a mortgage term, making it a great option for first-time buyers,” Ratehub co-founder and CanWise Financial president James Laird said.
“This rate decrease does not help Canadians qualify for a home, as borrowers will still be stress tested against the Bank of Canada’s 5-year benchmark rate of 5.19%. However, it does mean that household cashflow for borrowers will improve since locking in a lower mortgage rate will help decrease monthly mortgage payments.”
The current season is often the time “when all mortgage companies try to make sure they are on track to hit their annual targets,” Laird told CBC News last month.
“Anyone who’s behind at this point would be aggressive with the margins they’re willing to fund mortgages at right now.”
Loans of an average of 2.89% are now readily available to even higher-risk consumers. Together with Ratehub.ca’s offering, these are among the lowest levels seen since summer 2017.
“The hard cost of funding these loans is going down,” Laird explained. “And at the same time we are at the tail end of the most competitive market, when lenders fight for [business], so that’s when they are willing to thin out their margins a bit to attract volume.”