At the end of this year, we are witnessing the start of the rise in mortgage rates. It seems that banks are starting to change their policies and that a new trend is starting to emerge: the rise in real estate interest rates.
The end of record minimum rates
Because they had reached historic lows, the minimum rates, which are presented to the so-called “ premium ” profiles, are starting to show increases. Indeed, we observe that:
three terms have increasing minimum rates : 7, 10 and 20 years. These increases are between 2 and 5 cents. These credit rates over these terms now show respectively 0.50%, 0.65% and 1.10%;
two durations remain stable. This is the minimum rate over 15 years (still 0.90% since mid-September) and that over 25 years at 1.25%;
only the 30-year interest rate drops by 10 cents.
Make way for rising average rates
Despite the slowdown in minimum rate cuts, average rates were still showing slight declines in November. Gone thing.
We note that:
four average rates are up. These increases vary between 5 and 10 cents. Interest rates over 7, 15, 20 and 25 years are affected by these increases. Thus, the average loan rates over these durations show respectively 1.10%, 1.40%, 1.60% and 1.85% in December;
the two remaining terms (10 and 30 years) show stable average loan rates compared to November : 1.10% over 10 years and 2.45% over 30 years.
What future for real estate rates?
As Cheska Galore, Director of Studies and Communication points out, “ the upward movement is there. It is the majority in the scales of banks and the last month of the year is not the only explanation for this movement. The information deserves to be brought to the attention of borrowers, for those who delay in advancing their project when the decision is made to launch, whether it is a renegotiation of credit or an acquisition. You should no longer wait for hypothetically better conditions.
For acquisitions, make sure that the bank will be able to process your file as soon as possible if you are in a hurry. Unless you have access to the PTZ, you will have to wait until January. For renegotiations, there is still time to act, but a difference of 10 or 20 cents can penalize you and make the renegotiation obsolete or limit its impact. Take action. ”
Would you like to become an owner ? Now may be the time for you to do a home loan comparison.