As you most likely are aware the United States has some issues of late that has transcended into another stock market meltdown.
It is amazing that only 45 days ago we were getting strong indications that mortgage rates, fixed and floating, would start to move up gradually over the next year.
When discussing mortgage rates there are two distinct pricing areas, fixed and floating. Fixed rates are mainly price driven from the Canadian bond market and the floating rates are mainly priced from the actions of the Bank of Canada.
As of 630 AM this morning our pricing model for fixed rates indicates that a five year mortgage could go as low as 3%. This will happen if Canadian bonds stay at current levels for another few days or maybe even a week. The major banks have not yet moved their fixed rates downward, as I suspect they are waiting to see if the Canadian bonds will snap back once the market levels out.
In regards to the floating rate mortgages, it is widely suspected that the Bank of Canada may in fact lower its key rate by a ¼ percent at its meeting on September 07, 2011. This is a complete 180 degree, as we were expecting a few weeks back an interest rate increase from the Bank of Canada.
If you have any questions about the current mortgage rate market, please feel free to email me at firstname.lastname@example.org or directly at 604-657-1684.