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The Fall Of Fixed Rates

Finance | David | July 6, 2019

We find ourselves in a similar economic and rate environment to 2016 where we saw 5 Year Fixed rates at the lowest hit 2.24%. We had under 4 weeks to react and submit files at this price point so if reading this entices you to consider a low Fixed rate then please reach out right away to have your file built and submission ready. My last newsletter in May we were at 3.20% on a 5 Year Fixed. We now have some as low as 2.64% and still ‘no end in sight’. 
I’m presently in a 3.20% Variable rate and have the 2.49% Fixed and lower as a target where I’ll be looking to lock in. My team and I are presently running analysis on our clients mortgages to see what impact a 2.49% rate would have on their mortgages. For me, switching from 3.20% to 2.49% but keeping the same payment would save 27 months of payments. A HUGE savings. 
Many clients have already approached us to: 

  • Take out equity for a rental property purchase 
  • Renovate their home 
  • Consolidate debt 
  • Take advantage of the lower rates to pay off their mortgage faster 

We are excited about the possibility of deleting years off people’s mortgages due to this current environment. Especially when we saw rates clip near 4% just 8 months ago. 
Eg. $550,000 mortgage (our average) on a 25 year Amortization and having a 3.20% interest rate is a payment of $2665/month 
That same payment and mortgage size but on a 2.49% rate is 22 Years 7 Months amortization. 29 Months difference! 
$2665 x 29 months = $77,285 savings! 
You can see our motivation to get these analysis completed and reach out 🙂 
Please reach out to me directly at 604-329-9971 or david@sparomortgage.ca to have an analysis completed at the top of the list. For now we are still parking in Variable but it looks like a fall switch may be happening

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