Quote:
Originally Posted by Yoho
Interesting game of chicken your playing with your house, you must really be confident in something that no one really knows if rates will drop anytime soon.
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Bond markets are predicting the same thing. There's a reason that the policy rate went up to 50 points to 4.25% while the 5-year bond yield is virtually unchanged at just over 3%.
Banks and bond investors aren't charities. In times where you can get fixed-rate mortgage for a lower rate than a variable one (as you can right now), it's because the expectation is that interest rates will drop in the relatively near future and whomever is receiving the return on the fixed-rate loans will come out ahead in the end.