Plenty of options for homebuyers in terms of rates

Well it’s been four years since rates tumbled to the lows that the market is currently enjoying. And the near term future isn’t looking to change just yet either.

January of 2012 brought with it a new low by BMO. They kicked off their campaign with a 2.99% five-year fixed rate. As great a rate as it was, it came with a lot of hitches.

Even though every lender scoffed at BMO’s super low rate at the time, as most were in the 3.19-3.39 range, nowadays they are almost all in the same range as BMO was a year ago, however these days since everyone is in the game, the hitches are no more.

Today you can get yourself a 2.98% five-year fixed interest rate with all the bells and whistles. Meaning normal payout penalties, normal prepayment privileges, the only things they request are that your deal be completed within a 30-day period, it must be owner occupied and they do require mortgage default insurance (meaning CMHC or their competitors).

So if you are renewing your mortgage, buying your first home, upgrading your home, there are a ton of options out there for you in the new market of sub three per cent interest rates.

The odd thing though, is that on Friday a representative from a major bank told our group that mortgage yields (bankers’ fancy term for profit) are back to where they were prior to the great recession.

It’s hard to believe, however bond rates have had a lot of pressure from the market keeping themselves low and government institutions have kept rates low as the world economy is still in the intensive care unit.

Until the band aids come off of the global economy, we will see these rates for the near future, meaning another 12-24 months, and the government even went on to say that they are keeping rates low until the end of this year, but one never knows when it’s a person making the decision as opposed to the market.

If you only watched national news, one would think that the housing market is crumbling all over Canada, which in certain parts it actually is coming in with a soft landing.

Here in Alberta, and namely our region, Red Deer and region, we’ve actually had some value increases in 2012 and according to MLS stats the market is actually weighted more towards a sellers’ market as single family home listings are low compared to the average and there is a lot of movement with buyers right now putting some upward pressure on home values once again.

We’ve been very fortunate here, and although we’ve also seen some corrections, we’ve seemingly pulled through and much of it not by government’s doing but because of geography.

If it weren’t for the resources we as Albertans own, we’d be in the same shape as the rest of Canada and the world. So take advantage of our location as interest rates actually keep the housing market on sale.

A headline can even go so far as to advertise 50% off interest sale…as the normal discounted five-year fixed interest rate is about 6.00% for the 20 years prior to the recession.

Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for more information, questions or appointments at or 403-391-2552.