Rates are going down...or are they?

The Bank of Canada lowered it's overnight rate yesterday by 0.25%, to 4.25%.

Before you jump for joy that's still a bit higher than the past average, but better than 6 months ago.

The other thing to consider is that this does not have much impact on fixed rates which are more tied to the medium term bond market. Five year fixed rates are still in the mid-4% to low-5% range and seem very sticky.

Variable rates are starting to look pretty good when you consider the flexibility they offer. Most banks and mortgage companies have lowered their prime rate to 6.45% which results in 5 year variable rates in the range of 5.3% to 5.8%.

Considering there is optimism that the BOC will continue to lower it's overnight rate most people should be considering a variable rate option.

Each person has a different situation, so talk to a licensed mortgage agent, like me, to get the full picture.

I'm Steve Willson, a Mortgage Agent Level 1 with Mortgage Alliance in Toronto. These opinions are my own. You can reach me through my website: stevewillson.ca