It's been an eventful start to 2020. The thing on everyone's mind is the coronavirus and fear about it spreading is making waves throughout the world. There’s a lot of uncertainty and plenty of fear which can be seen from the stealing of face masks from hospitals to the puzzling line ups and cart races to buy toilet paper. This fear and uncertainty is also reflected in the current stock market which is seeing significant selling and investors putting money into bonds for perceived safety. Canadian 5 year bond yields (which 5 year fixed mortgage rates are based on) have taken a nosedive and are near record lows. The Bank of Canada (BOC) dropped the overnight lending rate by 0.50% on March 4th and has indicated they are willing to drop more if required.
So, you ask, how does this effect me? Well, from a mortgage perspective, it means if you are currently purchasing, renewing, or refinancing a mortgage you are going to get some great interest rates. If you currently have a variable rate mortgage your interest rate is going down. Also, any other variable rate interest products you have such as lines of credit, certain credit cards and variable rate car loans will have lower rates.
It's also a great time to review your mortgage even if you're not up for renewal. Given the low interest rates we are seeing (and the dust hasn't settled yet) it might make sense to see if there are savings to be had by doing a refinance or renewing your mortgage early.
Nobody can predict how the rest of 2020 is going to go but one thing is for sure, it's a great time for mortgage rates!