What's Happening with Rates?

As of Wednesday January 25th, the prime rate is now 6.70%.  The Bank is now satisfied with their current rate policy, and will watch it work its way through the economy before making any further changes.  

For purchases over $1M and all refinances, five-year variable rate discounts are unchanged and currently sit at about 6.30%.  The five-year fixed rates are falling and currently sit at approximately 4.99%.

For purchases under $1M with less than 20% down, the five-year variable rate discount is holding steady at Prime minus .90%, but the overall rate has gone up because of the prime rate increase (5.80%) and five-year fixed rates are at 4.64%, with more lenders lowering rates this week. 

For rental properties, expect a premium on the rate no matter the purchase price, lowest rate options are approximately Prime minus .40% or 4.99% for five-year fixed rates.  Expect higher rental rates for borrowers with large rental portfolios that need to squeeze out as much borrowing power as possible.  

Alternative lender rates are north of 6% with fees of 1-2%.  Private lenders rates are 7-9% or more for 1st mortgages, and 2nd mortgages are in the 9-12% range.  Expect fees of 4%+.  

If your renewal is coming up, many people are opting for shorter term fixed rates like the 3-year term instead of the 5-year fixed or the 5-year variable rate.  Feel free to ask me if you think that’s the right option for you. 

For a detailed analysis of the rates from the last year, check out my Instagram post: An interest rate analysis.