Summary: Fixed interest rates have been decreasing steadily over the past two months. At the same time, the variable rates have decreased with the prime rate decreasing but the “discounts” off of the prime rate have decreased. At this time, depending on someone’s risk tolerance and ability to afford a variable rate, about half our clients are taking variable rates and half are taking fixed rates.
The changes in rates above in (mostly) green show the difference from 2 weeks ago.
It’s important to note that these rates are not final – we can get better rates in many circumstances. The rate offered is subject to: your lender, date of closing of your mortgage, as well as mortgage size. The sooner the mortgage closes from the rate request, the better the rate, and the higher the mortgage size, the better the rate.
Many clients are taking 5, 4 and 3 year fixed rates at the moment, with some of the smarter ones taking the variable rate. I personally think that taking the variable rate at this time makes sense for two reasons: first, I think that clients will be better off over the long term with a variable rate, especially if we’re expecting an additional 1.25% cut by spring of 2025. And second, the variable rate allows one to lock in to a fixed rate at any time. So, if fixed rates go below 4%, it would make sense to lock in your variable rate for peace-of-mind, among other things.