They said it would never happen, but guess what? Mortgage rates are lower than ever in Canada. That may be good for anyone buying a house, but this is not so good because of the massive amount of debt we are accumulating in this country.
The mortgage rates have gone down as low as 2.94% in Canada on a fixed-rate five-year mortgage, which had Finance Minister Jim Flaherty essentially blowing a gasket. Flaherty fears that getting too aggressive with pricing will lead to a fatal downfall like the one we all witnessed in the United States in 2009.
Record breaking mortgage rates in Canada
According to Kelvin Mangaroo, president of RateSupermarket.ca, “The record-breaking rate, offered in Ontario, appeared July 24 and is expected to return as the precedent has been set.” What’s even crazier is that you can get a super attractive 10-year fixed-rate mortgage with a guaranteed rate of 3.76% – that is just unheard of.
Vince Gaetano from MonsterMortgage.ca, admits that some lenders have already quietly dropped back to 2.99%. “The banks are not publishing anything yet but there are a couple that in certain situations will go to 2.99% on a five-year,” Mr. Gaetano says.
What’s your take? Is this a great move on the part of Canadian banks or are we headed for a major financial drawback future?