Fixed mortgage rates are moving up from historic lows. We are now at Pre-Covid levels with a strong potential to go much higher. The good news is that we are finding our way with vaccines and distribution so that Canadian's and the world can gain protection from the virus. This also means a return to normal or a new normal that will mean stability in the markets. The bond market - specifically bond yields continue to rise with the Government of Canada 5 year bond settling at 0.91% at close yesterday.
Why do raising bond yields matter? They dictate the spread that a lender can make. If we know that lender margins are being squeezed, we are certain the response will be an increase in fixed rates.
Nearly one year ago, March12th, 2020 is the date I remember so vividly. I was setting out on a family vacation to Pender Island. We had rented a dream cottage over looking the ocean and were so excited for our March break vacation. My husband and I left early in the morning on the 12th and could no longer bear to listen to the news. The stock market was falling at a rapid rate with fear fueling what felt like a free fall. We sat inside the ferry at the front of the ship, scared, quiet and feeling the weight of this moment. An American couple, who had left their home for refuge in their Salt Spring cottage could not even discuss the days events and had sworn off the news. We truly did not know where we would land, and we were right,
So here we sit one year out and have so much to be thankful for and so many people to show our gratitude to. Optimism is coming back, with that markets move. For those who do not want to be left behind, create a financial strategy that takes advantage of low interest rates and lock in for another 5 year term. As rates rise penalties will decrease so it is important to work with a professional and secure a strategy and time to move your mortgage so that you have long term benefit.
Things changed quickly for us last March and I guess the moral of the story is that they will rebound quickly too. Call or email today and we will review and track that best time to shift your mortgage.
Stay safe, stay well and share your gratitude!