Mortgage Rates Below 3%

Mortgage Rates Below 3%

Long-time practice for Canadians is to lock into a long-term fixed mortgage rate instead of getting variable mortgage rates.

According to the latest statistics from 2014  the improving economy and current mortgage market offer very good conditions on the fixed mortgage rates what is just the opposite on the  variable mortgage rate that changes according to the prime rate.

On the other hand the historical data shows that choosing variable mortgage rate has been much more cost-effective than locking in on a fixed rate, in numbers that means about 85 percent of the time since 1975 the variable mortgage rates were more profitable and saved homeowners lots of money.

The economy specialists predict that the tide is finally turning for rates. The stock market sends warning signals the era of the low interest mortgage rates will soon end.

Mortgage Rates Below 3%

Currently, the five-year fixed mortgage rate from the big Canadian bank can be locked for about 3.19 percent. There are lenders, however, and independent mortgage brokers and credit unions that  offer five-year fixed mortgage rates as low as 2.84 percent.

On the other side the best five-year variable mortgage rates are around 2.30 percent, depending on the province. The conclusion is the lowest five-year fixed mortgage rates and the lowest five-year variable mortgage rates give the difference of 0.54 percent. From historical point of view, the difference between the two mortgage rates options has been much bigger.

The statistics show that even if the prime rate will raise by only one percent in 2015, signing for variable rates today will cost you more than a fixed mortgage rate.

If you decide to go for a variable mortgage rate you can always change and lock your mortgage into a fixed mortgage rate – excellent option if you see the mortgage rates start to rise.

But the mortgage experts’ conclusion is that doing so you may not get the lowest mortgage rates on the mortgage rates market.

The statistics from the Canadian mortgage rates industry in 2014 show 35 percent of homeowners with mortgages signed for fixed mortgage rates. On the other hand those who had signed for financing last months of the year, more than 80 percent had chosen to lock their mortgage rates.