Interest rates have been making headlines a lot in the past few weeks with fixed rates at new all-time lows once again. These words have been written quite a few times since 2009 and it’s getting tiring saying the same thing over and over, but it is still true and still very exciting!
In 2009 no one thought that the super low fixed interest rates would last this long, nor did we think that the granddaddy of them all, the five-year fixed would drop to the low 3% levels that have been seen in the past couple of months.
There have been a lot of short term specials coming through the Internet machine lately and as the spring market edges closer and closer those specials are apparently going the way of a Tiger Woods’ relationship. The deadlines are passing by to catch those last minute deals, but even if you lose out on 10 or 20 basis points the savings are still enormous to say the least with a regular rate hold.
The 120-day rate holds are still at the 3.29% level for five-year fixed rates, and the specials that are mostly deceased for the time being are 2.99-3.19%, so we haven’t exactly lost much ground at all.
It’s tough for me to say that one has lost out over a measly 10-20 basis points, because at these levels we are all basically getting deals that generations before us ever thought possible.
Everyone that comes through my office doorway gets an education of how lucky we truly are, and as easy as it is to say that, when I share the difference in the monthly payment they finally realize the value in today’s mortgage world.
The average mortgage that comes across my desk is $280,000, the payment on this – based on a 3.29% rate with a 30-year amortization – is only $1,221/month, and when we input the 20-year average of 5.85% (Stats Canada pre-2009) the payment is $1639! Well over $400/month difference compared to what we were able to offer in late 2008. That’s an enormous interest savings of $24,000 in the first five years alone!
Even though the Canadian and global economy is still trying to find its footing, the Alberta economy is firing on all cylinders, making us some of the most fortunate in the world as low mortgage rates, high employment and strong migration provide the housing market to grow. That being said we in Alberta face a different challenge – finding next door neighbours that aren’t crazy.
Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments or questions at 403-343-1125, texted to 403-391-2552 or emailed to jturcotte@regionalmortgage.ca.
