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.
Buying Your First Home: What You Should Know
Buying Your First Home Buying your first home for the first time is very exciting, whether it be an apartment, condo, townhouse, or house. It could come at wildly different stages for people. For some, they want to buy a house as their first major purchase, as early...