SMR Mortgage

Rake Hike… almost as expected March 29, 2010

Its been known for a long time that mortgage rates would be going up this spring. With pressure building for the Bank of Canada to increase the rates and the moves in bond rates recently it’s not that much of a surprise to see rates move higher. It is becoming more likely that you will be the BoC move their rates as early as June. That being said the driving force behind todays rate hike is the recent moves in the bond market.

For those who have been waiting for rates to move higher before locking in their variable rate mortgages they may have gotten more than they bargained for today. Most people where expecting rates to rise slowly giving them time to lock in some low fixed rates but the 5 year rate moved 60 basis points today. The top 3 banks have all moved posted rates from 5.25% to 5.85%. Rate hikes are expected to continue. Prime rate is expected to increase between 75 and 100 (0.75 – 1.0%) basis points by the third quarter this year.  

If you are in a variable rate mortgage you should lock your rate as soon as possible if you do not want to be stuck with a continually growing mortgage rate. Additionally, if you are planning to buy or refinance in the next 6 months you may want to do it as quickly as possible while rates are still reasonably low. Keep in mind that while not all banks have moved their rates yet, it is standard for all banks and lenders to follow suit shortly after the first bank changes their rates.