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This morning’s interest rate announcement

We get a newsletter from Paul Meredith who is a Mortgage Broker with CityCan Financial.  He has been consistent with his information and analysis.  We thought you would be interested to know what he has said about today’s interest rate announcement….

In this morning’s interest rate announcement, the Bank of Canada announced that they will be maintaining their overnight rate one again, which is the rate prime is based on. The announcement came at 10am this morning. May 25th).   This is exactly what was expected and anything else would have been a pretty big surprise.

For now, the prime rate remains 2.70%.

We have also seen discounts on variable rate mortgages increase (meaning lower rates) making variable rates an attractive option once again.  There are now variable rates as low as prime -0.95%. That's 1.75%! 

The lowest 3-year fixed rate has dropped to 2.15% and the lowest 5 year fixed is now 2.24%. These rates however are only available on high ratio purchases (LESS than 20% down payment), which the exception of the 3-year fixed which is available on both high ratio and also low ratio providing there is a 30% or greater down payment and the property value is under $1 million.

As mentioned previously, rates are now very dependent on the amount of equity in your home (or down payment if purchasing).  Lowest rates are found with LESS than 20% down payment, with rates pretty close to the lowest with 35% down (or equity position in your home).  Refinances, rentals, and properties valued at over a million will be priced higher.  Quoting mortgage rates is not quite as straight forward as they were in the past, so it's always best to email me to find out what rate you will qualify for.

This morning's announcement relates to prime rate, however prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields.  As they have been dropping lately, there have been some recent drops to fixed rates, hence the 3 year at 2.15% and the 5 year at 2.24%.

To contact Paul:

  • Paul Meredith
  • Mortgage Broker
  • CityCan Financial (Lic. 10532)
  • Office 416-484-1000
  • Direct 416-409-8009

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