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My Rates

1 Year 2.39%
2 Years 2.39%
3 Years 2.49%
4 Years 2.49%
5 Years 2.64%
7 Years 3.99%
10 Years 3.84%
6 Months Open 6.30%
1 Year Open 6.30%
*Rates subject to change and OAC
AGENT LICENSE ID
M14001073
BROKERAGE LICENSE ID
10349
Jason Kay President

Jason Kay

President


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7676 Woodbine Ave Suite 300, Toronto, Ontario

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As an experienced mortgage professional, with over 20 years experience helping thousands of Canadians it is my job to get you the mortgage you need at the price that you deserve. I work on your behalf and have access to over 25 different lenders. Let’s work together to get you the right mortgage!

 


BLOG / NEWS Updates

What does the Bank of Canada rate drop mean for Mortgage Rates?

Well WOW what a great couple of days with all this rate talk! With the Bank of Canada announcing a 25 bps rate drop, and talk of another possible reduction in March, perfect timing to get people thinking now is the time to buy. So the big question, what does this mean for mortgage rates? Fixed rates are directly tied to the 5 year government bond rate. Adjustable rates, or variable rates are tied to the particular banks posted prime rate. Neither of these rates are directly tied to the Bank of Canada overnight prime rate. This is why you havent seen any rate moves today. But that doesnt mean rates arent soon to be lower. Bond rates are more tied to the canadian dollar, and inflation. Today, the dollar is at a 6 year low, and inflation isnt a concern. So, bond rates are at historic lows. If I were to look at a typical spread between bond rates and 5 year fixed rates, consumers should be seeing rates in the 2.59% range. This is why I believe fixed rates will move lower. So what about banks prime? Well, thats up to the banks. If one bank moves theirs, others will follow. Supply and demand... As banks become more Hungry for mortgage assets, expect them to lower their prime rate by 25 bps. With the spring market right around the corner, expect hunger to grow! Here is a recent good article on this: http://www.huffingtonpost.ca/2015/01/22/interest-rate-cut-mortgage-rates-canada_n_6526430.html Today bank prime rate is at 3.00%. Discounts range from 50 to 90 bps (so 2.50% to 2.10%), depending on strength of client, product type, and mortgage options. Todays prime (fully qualified with good credit) 5 year fixed rates range from 2.94 to 2.79%. Im expecting that very soon we will see variable rates sub 2.00% and fixed rates as low as 2.69%. I can just envision a big advertising campaign for a 5 year mortgage at 1.99%. My money is on BMO to do this around March. Just a guess! Does this mean your clients can afford more of a mortgage? Short answer is not really as rates are so low to begin with, a drop of 10 bps has minimal effect on interest costs. Maybe they will be able to qualify for an additional $15,000. Not that much in todays hot GTA market. Never before have Canadians had access to such cheap mortgage money. Im advising some clients to actually put less down payment, and go for a longer fixed term depending on their long term needs. Now is the time to lock in. Now is also the time to buy that move up house, as affordability in terms of interest rate is wonderful. Want to discuss, or find out how this effects you? Im just a call away. Jason

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