Historically low fixed mortgage rates are quickly evaporating!

The best thing of the current pandemic recession (well, if you even allow to call anything “best” nowadays) is the rock bottom mortgage rates. But looks like the party is going to the end at least for fixed deeply discounted offers.

The deal is that the 5-year government yield, which affects fixed mortgage rates directly, is rising, although it hasn’t shown any increases during a nine-day period in about 10 years. Today, at some point, the yield exceeded 1%. It’s more than doubled since February 11, marking a 0.50% gain during less than two weeks.

We’ve seen historically low rate volatility for several months already. As a rule, such tendencies have a strong staying power, as they reflect fundamental changes in the economic outlook.

Usually, yields don’t return to their breakout point for several quarters or even years. That’s why in case you need a mortgage, please, get your fixed rate while it’s available.

The question is whether the fixed rates can get back to new lows in 2020. And although anything is possible, it’s not a bet most people should probably make.

As yields are increasing funding costs, dozens of lenders have already raised their fixed rates. While there were no responses from the Big 6 banks, it’s quite possible that we’ll see a significant price increase from them in the nearest future. Following 11 months of rate declines, numerous borrowers will hurry up trying to lock in.

At the current moment we still have some great deals for fixed mortgage rates, but window of opportunity is closing fast.