*Updated* Ongoing Bank of Canada Benchmark Rate Announcements

[Sylvanfan]

Originally Posted by The Fonz

September came in at 1.6%. Odds are we see a 50bps cut next week.

It's possible, but with the next policy rate being next week and 2 weeks ahead of the U.S. Election I wonder if they stay cautious and just do a 25bp cut now than 50 at the last one of the year.

Unemployment is starting to move up a lot. 9% in Edmonton which is really high. 6.5 Nationally and up to 7.5 in Alberta. The jobs don't look to be here anymore so all the people chasing less expensive housing might be heading back to the greener pastures of Ontario.

[Hot_Flatus]

Originally Posted by The Fonz

September came in at 1.6%. Odds are we see a 50bps cut next week.

Everything I have read leads me to believe this could very well be the case as well. The BoC even said they are going to be reactive in dropping and won't necessarily adhere to slowly ratcheting down rates if it is clear they don't need to stay high.

As we are renewing our mortgage in August, I think it is very likely that fixed rates are in the 3.0-3.5% range provided nothing goes bonkers. This would still double our current rate, but is much more in line with and even below historical averages.

[Sylvanfan]

Originally Posted by Hot_Flatus

As we are renewing our mortgage in August, I think it is very likely that fixed rates are in the 3.0-3.5% range provided nothing goes bonkers. This would still double our current rate, but is much more in line with and even below historical averages.

What makes you think that? Most of what I'm seeing says we are already close to where fixed will bottom out at. Between now and February is more or less when that should happen and they'll be around 4% give or take. Even if The overnight policy rate was to fall to 2%, bank prime will still be 4.35 and for a lot of us the low end variable will still be 3.35 until they start going up.

I'm not sure we will be seeing fixed rates in that range for quite some time.

[opendoor]

Yeah, fixed rates are based on bond yields, which are currently at 2.875% for 5 year bonds. For those to drop 0.5-1 percentage points from here, traders would have to either think that the policy rate is going back down to emergency level rates in the near future, or that it's going to the ~2% range and will stay there for years.

Because a 5 year not only has to price in the current drop, but also a potential recovery afterwards where interest rates get raised. So even if they think rates are going down to 1.5-2% in this cycle, they have to allow for them potentially going back up to 3-4% in a few years, which means 2.5-3% (i.e. the current yield) is about the mid-point of that. And that yield translates into ~4% fixed rates.

[Nancy]

https://twitter.com/user/status/1849086852218634628

[Old Yeller]

I'm a little spiteful and bitter that some of my buddies whose mortgage doesn't come due until 2025 aren't going to feel the pain that I felt.

[Ace]

Originally Posted by Iggy_12

My current rate is 2.34 I locked into a 5 year fixed that is set to renew in April 2025. Feel like I am right in the middle so I am looking for advice. Do i sign a variable mortgage and wait for rates to come down even more as predicted by the end of 2025 then switch over to a fixed when it gets somewhat close to my current rate?

All this stuff seems pretty confusing. To add to the confusion like Erik, i am going through a separation, i had been pre approved to take over the mortgage myself, is it as simple as just assuming the remaining portion of the mortgage or do i do nothing until April? I have a separation agreement from the lawyers, do I just take that to my bank get approved and mortgage doesnt change until its time for renewal in April?

I would look at a variable through ATB. ATB is unique in that they post their actual rates (not fake rates that nobody actually signs for). This is important because the variable rate mortgage can be converted to a fixed at anytime. When you convert you'll be converting to an actual market rate. With the big banks you'd have to pay their overinflated posted rates.

[chemgear]

Originally Posted by Old Yeller

I'm a little spiteful and bitter that some of my buddies whose mortgage doesn't come due until 2025 aren't going to feel the pain that I felt.

Well, hopefully they lose their jobs in the coming months.

[Engine09]

Originally Posted by Ace

I would look at a variable through ATB. ATB is unique in that they post their actual rates (not fake rates that nobody actually signs for). This is important because the variable rate mortgage can be converted to a fixed at anytime. When you convert you'll be converting to an actual market rate. With the big banks you'd have to pay their overinflated posted rates.

Will definitely give them a call, good info.

I'm prepping to renew in Dec and have started getting rates from a few brokers, what I'm getting back is a way too high.

[Sylvanfan]

Originally Posted by Engine09

Will definitely give them a call, good info.

I'm prepping to renew in Dec and have started getting rates from a few brokers, what I'm getting back is a way too high.

With ATB I believe that if you have a variable you cam move to fixed without penalty so long as the term is the same. But honestly fixed rates won't come down much and likely plateau around February.

If you get high 3 or low 4 on a mortgage...that might be the best rate you'll see for quite some time.

[rotten42]

I like seeing this rate go down. I'm in a locked rate at 2.09% that comes due next October. I'm hoping to avoid all the pain of the rates over the last couple of years.

[Sylvanfan]

Originally Posted by rotten42

I like seeing this rate go down. I'm in a locked rate at 2.09% that comes due next October. I'm hoping to avoid all the pain of the rates over the last couple of years.

People always talk about the rate. But amortization and outstanding balance are huge factors too.

Buddy of mine who has 5 years left...the rate increase for him is not that bad as he's in the stage where a lot of the payment is against Principal. 6% vs 2% doesn't move his payment all that much. If you have a high ratio 500k mortgage with 20 years left, it's going to hurt.

[Engine09]

Originally Posted by Sylvanfan

With ATB I believe that if you have a variable you cam move to fixed without penalty so long as the term is the same. But honestly fixed rates won't come down much and likely plateau around February.

If you get high 3 or low 4 on a mortgage...that might be the best rate you'll see for quite some time.

I'd be fine with low 4%. Currently with MCAP and just today they quoted me 7.44% on a 1 year fixed, 7.14% on a 2 year fixed and 4.54% on a 3 year fixed.

I told them I won't be renewing with them.

[Leondros]

Originally Posted by Engine09

I'd be fine with low 4%. Currently with MCAP and just today they quoted me 7.44% on a 1 year fixed, 7.14% on a 2 year fixed and 4.54% on a 3 year fixed.

I told them I won't be renewing with them.

Those 1 year and 2 year fixed can't be right...

[Engine09]

Yeah, complete waste of time. Straight from the MCAP email:


Our current shorter term renewal options are as follows:

1 year fixed 7.44%
2 year fixed 7.14%
3 year fixed 4.54%

[Firebot]

Originally Posted by Leondros

Those 1 year and 2 year fixed can't be right...

Some lenders will make it really clear that certain products they don't want to offer, but will still do so at exorbitant rates if you are stupid enough to go for it.

I've had a lender outright refuse to take my mortgage on a rental and quoted a 5 year rate at 3-4% higher versus market, even when I had my primary mortgage with them. Needless to say I moved my primary mortgage as well as soon as it was time to renew it.

[Engine09]

I've been in touch with Tim LaCroix from here on the board, True North, Mortgage Doctors and Dominion so far. ATB is next, if anyone has other recommendations, post them up!

[Qwerty]

Originally Posted by Engine09

Yeah, complete waste of time. Straight from the MCAP email:


Our current shorter term renewal options are as follows:

1 year fixed 7.44%
2 year fixed 7.14%
3 year fixed 4.54%

For what its worth, I got a 3 year fixed @ 4.79% in April this year with CMLS. I went with three years as I assumed the Gov't would drop rates so all the COVID mortgages wouldn't bankrupt people when they go from Sub 2% to 5%. Hoping to get on the same renewal as that group. I feel envious of everyone that got in at those rates.

[opendoor]

Originally Posted by Qwerty

For what its worth, I got a 3 year fixed @ 4.79% in April this year with CMLS. I went with three years as I assumed the Gov't would drop rates so all the COVID mortgages wouldn't bankrupt people when they go from Sub 2% to 5%. Hoping to get on the same renewal as that group. I feel envious of everyone that got in at those rates.

I don't know, anyone who got those rates was stress tested at ~5%, so I don't think there's going to be a huge artificial push to lower the policy rate for their benefit. If their squeeze impacts the wider economy, then yeah. But they had no problem vastly increasing variable holders' rates.

[Bill Bumface]

Ignoring the economic implications, I'm sad that the era of rewarding people for personal fiscal prudence is coming to such a quick end.

I'd be curious to see what household savings numbers look like in high interest rate vs. low interest rate environments.