26 March 2019

RBC has already cut its rate twice: by 0.10% on March 1 and by 0.15% on March 13. Today, its five-year fixed rate is 3.49%. Others follow the example, so you can find even 3.19% offers.

Variable rates are facing the same trend, although caused by other reasons.

While fixed rate mortgages depend directly on the bond market, variable rates change when the central bank’s rate does.

Now investors predict rate declines, and not increases. They believe there’s a zero chance for a rate hike in 2019, but a one-in-five chance of a cut by July, and even a 44% possibility of it by September.

“One of the main changes in our quarterly March forecast was the removal of interest rate hikes from our outlook,” – TD Bank’s chief economist Beata Caranci noted.

The deal is that variable rates not only stopped growing, they changed the direction and began to fall. Today, the rates below 3% are a usual thing. It’s a well-known fact that spring is always a key time in the mortgage markets, as the largest share of home sales is reported during this period. That’s why lenders compete as strongly as possible trying to attract more borrowers with low rates and get the largest share of the sales.