Multiple banks (CIBC, RBC, TD, Scotia) are slashing variable discounts again, effective tomorrow.
Second-tier lenders probably won’t be too far behind.
Banks are dead-set on herding borrowers out of low-margin variable rates. Spreads are simply not profitable enough—at least compared to succulent and juicy fixed-rate margins.
When the dust settles, we’re hearing estimates of variable rates on the street moving to prime – 0.40%, or perhaps prime – 0.50% for aggressive lenders.
New borrowers now face a decision:
A 2.50% rate that moves (i.e., variable)
A 2.49% two-year, 2.99% four-year or 3.29% five-year rate that doesn’t (i.e., fixed).
Consumer psychology being what it is, there will certainly be a giant shift into fixed-rate mortgage originations, given this new pricing.
Exploring the Pros and Cons of Different Down Payment Percentages In our previous blog, we emphasized the importance of understanding down payments in the context of your mortgage journey. These initial payments play a pivotal role in shaping your homeownership...