There has been a lot of chatter in the markets over the past week about fixed rates rising.  This is mainly due to the government bond yields continuously rising which in turn will impact fixed mortgage rates.  While many are enjoying the benefits of ultra low rates since the start of the pandemic, we could expect to see rates rise with lenders over the next week.  We have already had notification from two major banks that fixed rates are rising, some effective late last week and some effective this week.  It’s only a matter of time that they all follow suit.

With that said, it doesn’t necessarily mean time to panic.  We are still at record low variable rate mortgages for those that are a little more comfortable with risk and would rather take advantage of savings and lower payments.  While no one has a crystal ball, each borrower needs to do what is best for you and your risk tolerance. The way to protect yourself?

1. Secure a pre-approval if you think you are about to purchase a property, either a principal residence or investment property.  This will protect you for 120 days while you shop for further increases.

2.  Request a lock in agreement from your lender if you are thinking of locking in your variable rate.  This generally protects you for 7-10 days while you decide what to do.

3.  Set your payments higher on your variable rate so you have more going to principal.  Often we will advise people to set their variable mortgage payment to a fixed rate amount to protect you from rising rates when the day comes.

We are here to chat anytime you need assistance or would like some guidance with your new or existing mortgage.

~Trish~