Is now finally the time to consider locking in?

What a time of uncertainty!  

With the kids heading back to school in September, nearly all of the conversations we are having right now loopback at some point to the potential threat of a second wave.

That second wave looms over real estate in the form of a “buy-before-the-2nd-wave” mindset.  It also looms over the calendars of parents who are planning for back-to-school.

How does the threat of a potential 2nd wave impact interest rates?  Similar to those parents who prepare themselves emotionally for a second school shutdown, the Bank of Canada is preparing to take another hit.

The BoC has kept interest rates low at 0.25% and CIBC’s Avery Shenfeld is calling that it will stay that way until the end of 2022.  From there, GDP growth will hopefully be back on track. We can expect interest rates to slowly rise during the recovery.

Meanwhile, the BoC is also providing stimulus to maintain high liquidity for the banks. This is so they can continue to lend at extraordinarily low-interest rates.  Some lenders are offering below 2.00% for new mortgages and clients who convert to fixed will be offered something slightly higher than that.

What does this mean for you?  

It means that this is a good time to evaluate your options.  Converting to fixed could prove to be the best course of action for the next 5 years.  Some clients will take advantage of low rates to restructure their finances or borrow for renovations.  For others, it will be cheaper to stay variable until the end of your current contract. At that point, you can revisit your options.

Converting to a fixed-rate generally means taking a higher interest rate now to save interest later.  If you are thinking about it, please reach out and we will be happy to talk with you about your options.

For community news, financial tips, industry updates, and more visit and browse the rest of the Personal Mortgage Group Blog.