The impact of COVID-19 on mortgage rates

Crashing stock markets, plummeting oil prices, and fears over the COVID-19 pandemic have resulted in multi-year lows in mortgage interest rates, making it an excellent time to consider buying or refinancing your mortgage. 

Since most lenders have dropped their Prime rates by 1% in the last 3 weeks (from 3.95% to 2.95%), clients with variable rate mortgages are seeing significant decreases to their mortgage payments, as variable rates go up and down with the Prime rate. For example, you may have a variable rate of Prime minus 0.75 meaning that today your rate would be 2.20%.

Fixed mortgage rates continue to drop and are between 2.39% - 2.69% for 5 year fixed terms. The lowest rates go to clients with insured mortgages (less than 20% down), and clients with conventional mortgages or rentals will have rates around 2.69%. To put this in perspective, last year at this time the most competitive rates were between 3.19%-3.39%.

Keep in mind however, that rate is only one small piece of the mortgage discussion. Making a mortgage decision solely based on rate can be a costly mistake if you aren't fully aware of what you're signing up for, especially when it comes to break penalties. All lenders calculate penalties differently, so it is important to review all of the conditions before selecting a term.

Now is a great time to consider buying, or refinancing, as the mortgage rates are the lowest that they have been in years. I will help you navigate all of your options, and will break down the differences between fixed and variable terms, and will help you choose the type of mortgage that is best for you.