Canadian Interest Rates Fall to Near Historic Lows
July 28, 2020 | Posted by: Keith Leighton
CANADIAN INTEREST RATES FALL TO NEAR HISTORIC LOWS
Interest rates have fallen to near historic lows due to the Covid-19 pandemic that has ravaged the economy and caused widespread unemployment.
The five year fixed rate is the lowest it's ever been in Canadian history. The Bank of Canada has slashed the key interest rate three times in March, but variable mortgage rates did not follow because banks are trying to protect themselves against its losses due to COVID-19 pandemic.
However, now rates have dropped to near historic lows. Depending on your situation these low rates could mean huge savings. It’s a great opportunity for anyone who has a mortgage coming up for maturity or is looking to buy a house. It could also be an opportunity for some homeowners to refinance and consolidate debt. There is still a little room for the rates to come down a little bit more, but two percent is historically low and if you have a mortgage up for renewal or you're looking to refinance now is the time to do it.
If you are locked into a long-term mortgage, you may be profitable to break your mortgage to take advantage of lower rates but consider the penalty before you break your mortgage. That being said, rates are likely to remain low for some time with the uncertainty in the economy and COVID-19 still being an active threat.
When there is poor economic news and high unemployment numbers staying high, it’s likely that interest rates to stay low to help in the recovery.
If you are shopping for a new mortgage, it can pay to do your research. Even if you do not switch to a new lender, it is good to know what others are offering because it can help with negotiating a lower mortgage rate. Call your DLC Ideal Mortgage Broker today for more information.