Interest Rates – June 11th Category: Education and Learning, First Time Buyer, Home Purchase, 1. Interest Rates *Interest rates as of June 11th, 2024. Rates subject to change (I have to write that ) Variable v.s. Fixed Right now, we’re seeing quite a few people pick the variable rate over the 3-year fixed… I don’t blame them. Let’s take a look at the numbers. The graph above shows rates decreasing by 0.75% from month 6-12 (technically, rates would decrease before that) and an additional 1.5% over the next two years. This is in line with what CMHC is predicting. CMHC is predicting an additional 50% decrease in rates in 2024, and 1% decrease in 2025 and an additional 1% decrease in 2026. The graph above shows that a borrower would be $5,700 better off (interest-wise) over the course of 3 years if they choose to take a variable. However, since the payments are higher to begin with ($320), they also pay almost $11,500 more in principal payments, providing for a $17,200 difference in final mortgage balance. What’s important to note is that while I suspect/expect the variable rate to be the best bet, borrowers are also able to lock in their variable rate into a fixed rate at any time. This feature is called converatibility. So, for those who are squeamish on holding the variable rate, it’s my opinion that getting a variable rate now, while rates are still high, would be prudent because when rates decrease over the next 4-12 months, locking in at a lower rate is an option. So, a client may start with a rate of 6.15% and have it go down to 5.4%, but then be able to lock into a fixed rate at 4.5%… Food for thought. It’s more important than ever to have a mortgage broker explain the ins and outs of what’s possible with mortgages and build a strategy that fits each client. We’re here to help!! Continue Reading: Read Article May Jobs Report / Probable July Rate Cut Category: Education and Learning,First Time Buyer,Home Purchase, May Jobs Report / Probable July Rate Cut In the first major data release since the Bank of Canada cut interest rates last Wednesday, Statistics Canada Labour Force Survey for May showed a marked slowdown from the April surge. Employment was little changed and the employment rate fell 0.1 percentage points to 61.3%, the seventh […] Read Article Read Article Stats from CMHC's Consumer Survey Category: First Time Buyer, Good Afternoon Amazing Partners, In today’s post 1. Interest Rates 2. CMHC’s Consumer Survey *Please call us! 778-990-8950 We’re willing to help even if the borrower is not our client. We’re in this for your success! Interest Rates**Rates as at May 14, 2024. Subject to change without notice. 5 Yr Fixed (insured) 4.74% – 3 Yr Fixed (insured) 4.99% – […] Read Article