Mortgage Rates are Dropping Soon!

mortgage rates declining

Mortgage rates are on the decline, and it’s a reason to celebrate!

Recent reductions in bond yields have prompted mortgage providers across the country to respond with lower fixed mortgage rates. While the rates may not drop as dramatically as bond yields, there’s certainly a glimmer of hope for more affordable home financing in the near future.

In this blog, we’ll delve into what’s happening in the mortgage market through some articles I read this week and what it means for you, and how you can make the most of this exciting opportunity.

Recent economic outlooks suggest that mortgage rates may drop soon. This is a significant opportunity for anyone who has been waiting on the sidelines to make a real estate move.

As you know, when rates go down, it typically spurs increased demand, which can lead to higher property prices. As mortgage agents, we’re already seeing rate adjustments, making it an ideal time for potential homebuyers to act.

It is significant to highlight that anyone who secures a rate now may have the chance to benefit from a lower rate if rates decrease before their closing date. We can assist you in securing the lower rate or explore other lenders with better offers.

The important point here is that while banks may not inform their clients about competitive rate options, we are dedicated to ensuring our clients make the most informed and advantageous decisions for their financial well-being.

No more rate hikes expected as unemployment rate rises to 21-month high

Three key takeaways from the article:

  1. Canada’s unemployment rate increased slightly to 5.7% in October, despite the creation of 17,500 new jobs, signaling a more passive stance for the Bank of Canada.
  2. The job gains were primarily in part-time positions, with declines in economically sensitive sectors like wholesale and retail trade, manufacturing, and finance and real estate.
  3. Economists believe that further interest rate hikes are unlikely, with the possibility of a rate cut in the second quarter of 2024, as the labor market eases and inflation persists.

Experts predict lower mortgage rates next week as bond yields plunge

Three key takeaways from the article:

  1. Bond Yields and Mortgage Rates: Steep declines in bond yields are expected to lead to lower fixed mortgage rates, with potential drops of 20 to 40 basis points over the next few weeks.
  2. Economic Concerns: Weakening economic indicators, including falling inflation and employment data, are influencing rate forecasts. Markets are increasingly pricing in the possibility of a rate cut by early 2024.
  3. Rate Cut Possibility: Deputy Bank of Canada Governor Carolyn Rogers indicated that the central bank may consider lowering interest rates even before inflation reaches its target rate of 2%, as economic conditions continue to deteriorate.

Lenders cut fixed rates by up to 30%

Three key takeaways from the article:

  1. Lower Mortgage Rates: Good news for homebuyers! Mortgage providers are reducing fixed mortgage rates in response to a significant drop in bond yields. Many national mortgage providers have cut rates by 0.10% to 0.25%, especially for 3- to 5-year terms.
  2. Bond Yields Decline: The 5-year Government of Canada bond yield, which influences mortgage rates, has fallen by 0.60% from its recent high in early October. This drop is contributing to more affordable mortgages.
  3. A Glimmer of Hope: While rates aren’t dropping as much as bond yields, there’s optimism for lower mortgage costs. Lenders are adjusting cautiously due to economic uncertainties, but homebuyers can still enjoy some savings.

If you have any questions about your mortgage or want to discuss how these changes may impact you, don’t hesitate to reach out to us. Book a call today! We’re here to help you navigate this exciting opportunity and make informed decisions about your mortgage.

Share this valuable information with your friends and family who may also find it beneficial. Together, let’s embrace this new hope on the mortgage horizon!

Erica Vincelli White Background
Erica Vincelli
Mortgage Agent