Jordan Lee's Happy December Market Update

Happy December :) I am here with the gift of good news as we roll into the holiday season yay!

As we all know, last week, BoC held its interest rate for the third consecutive time. In them doing this, Bank of Canada officials acknowledged that higher interest rates are 'clearly' restraining household spending and that the economy is no longer overheated. But in that same breath, they continue to mention that they will increase interest rates if inflationary pressures persists.

***FIXED TERMS***

This is the juicy stuff you guys will all want to know : )

• We officially have a 5 year fixed insured rate (less than 20% down payment) at 4.99%
• We are starting to see rates with a 5% in front of it on insured and uninsured deals as well 
• I am getting mid-high 5% on the 3 year fixed insured + uninsured currently with certain A lenders
• Your shorter terms (1-2) will be closer to 6% and longer terms (4-5) will be closer to 5%

***VARIABLE TERMS***

• One of my favoured terms right now as flexibility is key with where we currently are in the economy 
• The 5 year variable allows you to pay the lowest penalty, which is three months interest
• It allows for the most flexibility as you can lock into a fixed term with no penalty at any time therefore allowing you to time the market
• You can also decide to refinance and switch lenders if another rate promotion comes up with the small penalty of three months  interest
• You will ride the interest rate wave down as Prime rate begins to come down
• The average expectation remains 1 to 1.50% decrease in 2024 on Prime rate
• Right now, the best uninsured variable rate is roughly Prime -.70%, and the best insured variable rate is roughly {rime -1.10%

BOTTOM LINE: we’re not yet at levels consistent with those that peaked the market in spring of 2023, but we are seeing some stellar fixed and variable rate promotions that are helping with affordability in some cases. 

It is important for our clients to take advantage of this winter market especially as buyers and have a full understanding of their rate options going into it. It is crucial to choose a sensible term based on short/long term goals and at this particular time in the economy. It is no longer as simple as choosing the lowest rate, or the standard 5 year fixed. 

Let’s hope this good fortune and downward rate trend continue into 2024 🙏

Ps. I am here through the holidays if there is anything I can assist you or your clients with

Happy holidays and 2024!

Best,