VANCOUVER (NEWS 1130) – It could soon get more expensive to get a five-year, fixed-rate mortgage, with signs suggesting rates could climb after sitting at record lows for an extended time.
Lenders are getting in touch with mortgage brokers to warn them of potential increases due to rising yields in the bond market.
Reza Sabour with the Canadian Mortgage Brokers Association of B.C. says that means if you’re in the market for a fixed-rate loan, this could be the time to make a move.
“So, it would be good to lock something in if you’re definitely in the market,” says Sabour. “And, if this does happen, it’s affecting the fixed rates for now. So, variable is still a very good option, and something I encourage a lot of my clients to think about in today’s economy.”
The fixed-rate mortgage rates are tied to the bond market, which saw gains this week.
Sabour says, generally, when lenders see spikes in bond yields such as these, “they pre-emptively send a message out to their mortgage brokers, branch staff who deal with mortgages,” to tell them a change could be coming.
Admitting it can be speculative, Sabour says lenders do this to try and pre-approve a rate before they possibly go up.
“If you’re sitting on the fence, if you’ve been thinking about getting a pre-approval and you haven’t really pulled that trigger or called a mortgage broker yet, I would highly encourage people to do that, if they are in the market to buy and especially if they’re in the market to buy very quickly,” he adds.
Banks have not actually increased the rates at this point, and there’s no guarantee they will.