I had never heard of Silicon Valley Bank until earlier this month. Now, the collapse of that bank and its impact on the financial markets is evident. In Canada, the 5-year bond yield (an important driver of fixed mortgage pricing) has seen rates fall over the past few weeks. There are many other factors that play a role in the bond yield like the predicted recession, employment data, and inflation but, looking at the charts, there is no denying a correlation.
To buyers and sellers alike, this is welcome news. Fixed rates are historically about 1-2% higher than the bond yield so they have been going down as well. Along with the projected pause in the lending rate from the Bank of Canada and the warmer weather, I’ve seen an increased interest in pre-approvals and those thinking of moving.
Things can change quickly and that line could start to go up again.
If your mortgage is up for renewal within the next 120 days, you can start to negotiate a new one now. We can lock in a rate in case they rise but also still have the potential to get a lower rate if they decrease. I’ll line up your renewal dates so you do not have to pay an early payout penalty. Plus, you get it done and over with now.
If you’re thinking about purchasing a home this spring, I can get you pre-approved and hold a rate for you for 120 days. Having one in place gives you the confidence to shop for a house within your budget.
Get in touch for a free consultation to talk about your unique needs.