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Mortgage Rates 2021

The interest rate of your mortgage is a very important and vital component to your overall cost of home ownership.  At Homefund, our relationship with our network of over 31 institutional lenders makes it possible to source the lowest rates offered.  And very often they will have special promotions that will save you thousands of dollars on your mortgage.

“You come to us for the rate, you’ll be back for the service!”™

Date updated: October 11, 2022

Term Posted Bank Rates Homefund Best Rates
6 months 6.34% 6.19%
1 year 5.69% 5.39 – 5.64%
2 year 5.59% 5.39 – 5.54%%
3 year 5.59% 5.24 – 5.39%
4 year 5.89% 5.24 – 5.34%%
5 year 6.14% 4.69 – 5.34%
5 year Variable Rate 5.20% 4.40% – 4.95%
6 year 6.29% 5.54%
7 year 6.40% 5.64%
10 year 6.65% 5.80%
Secured Line of Credit Prime + 1.00% Prime + 0.50%

Rates are subject to change at any time without notice. Contact our office for other mortgage products. Rates based on Prime Residential. No Fees For Qualified Applicants.

Historical Rates in Canada

This chart has tabulated the conventional mortgage since 2005 for 1 and 5 years fixed rates, along with the Bank of Canada overnight lending rate. The rates charted are Bank Posted Rates, but actual approved rates are typically discounted. A study conducted on behalf of CAAMP estimates that the average discount on a 5 year mortgage was 1.40% below the Bank Posted 5 year fixed rate.

Percentage of Mortgages by Type,
For New Purchase Mortgages and Recent Renewals
Mortgage Type Purchase
During 2018
Renewal or
Refinance During
2018
All Mortgages
Fixed Rate 68% 67% 68%
Variable or Adjustable Rate 30% 25% 27%
Combination 2% 8% 5%
All Types 100% 100% 100%
Source: Mortgage Professionals Canada survey, fall 2018

Fixed vs Variable Rate Mortgages

One of the more important decisions right from the start is choosing a fixed rate or variable rate mortgage term. Economists provide predictions, and for over 20 years at Homefund we have seen them being off the mark. So how do you decide with confidence?  Homefund Mortgage Specialists can’t predict the future, so we examine and remove as much risk as possible. We analyze mortgage rate trends, mortgage conditions and other mortgage variables to provide you with the right guidance.

October 6, 2022:  Bank of Canada’s Tiff Macklem Hints That More  Interest Rate Hikes Are “Warranted”

Prospective homebuyers were reassured back in 2020 that interest rates will remain near historic lows “for a long time,” according to Bank of Canada Governor Tiff Macklem.

However, that wasn’t completely true as we’ve experienced this year – we’ve seen rates rise 300 basis points and he said additional rate hikes (plural) are planned.

In a prepared speech delivered at the Halifax Chamber of Commerce, Macklem said the Bank has yet to see clear evidence that underlying—or “core”—inflation is coming down.

“When combined with still-elevated near-term inflation expectations, the clear implication is that further interest rate increases are warranted,” he said. “Simply put, there is more to be done.”

Additionally, he said labour conditions remain “very tight,” wage growth is rising, and the economy remains in excess demand. “We will need additional information before we consider moving to a more finely balanced decision-by-decision approach,” he said.

Observers took the comments as hawkish and a signal that the Bank isn’t likely to pivot to a more dovish stance at its upcoming rate meeting on October 26 as some had expected.

“There had been a narrative offered in the market that October’s hike would be one more and done with a coming dovish pivot,” wrote Scotiabank economist Derek Holt. “That narrative got flushed today.”

“With less than three weeks to go before the next decision on October 26…the Governor is clearly not thinking that the October communications will involve a dovish pivot versus a largely preset path to keep hiking thereafter,” he added.

A terminal rate of at least 4% is growing more likely

With the benchmark lending rate currently at 3.25%, there are growing expectations that the Bank of Canada’s terminal rate for this tightening cycle will be 4%, if not higher.

“If the BoC hikes 50+ [bps] this month and is signalling the plural form of rate hikes still lies ahead, then markets are probably correct in pricing a terminal rate over 4%,” Holt wrote.

Bond markets are currently pricing in equal odds of a 25-bps or 50-bps rate hike later this month, but Macklem’s comments could start to tip the scale towards the latter.

“The hawkish nature of this speech affirms our expectations that another large move (i.e., greater than 25 bps) on October 26 looks to be in the offing,” noted economists from National Bank of Canada. “The tone here would presumably be consistent with continued tightening in December, where we see the policy rate at no less than 4%.”

Earlier this week, the Organisation for Economic Co-operation and Development (OECD) released its latest economic outlook, where it forecasts the Bank of Canada’s benchmark rate to reach 4.5% in 2023.

“Further policy rate increases are needed in most major advanced economies to ensure that forward-looking measures of real interest rates become positive and inflation pressures are reduced durably,” the report reads. “This is likely to involve a period of below-trend growth to help lower resource pressures.”

Rates are subject to change at any time without notice. Contact our office for other mortgage products. Rates based on Prime Residential. No Fees For Qualified Applicants.