(Unsplash)

Drop in fixed mortgage rates a ‘welcome cooling period’: real estate agent

Major banks dropped their rates this week

A slight downturn in mortgage rates shouldn’t send prospective buyers into a tailspin, according to a Lower Mainland Royal LePage advisor.

At least two of the country’s main banks, the Royal Bank of Canada and the Bank of Montreal, lowered their five-year fixed mortgage rates this week.

Adil Dinani said the fixed rate depends on bond yields, and “when the bond yield goes down, rates go down.”

The Bank of Montreal dropped its rate by 0.15, down to 3.74 per cent.

“It’s so marginal that it doesn’t really have a material impact on how much money they’re going to lend or how many people buy homes,” said Dinani.

But it does is a “psychological effect,” he said, as some homeowners look to swap from variable rates to fixed ones.

The reason behind the potential swaps is that variable rates are affected by the Bank of Canada prime rate, which has gone up 1.25 per cent in the past year and a half.

Fixed rates are unaffected by that and are instead tied to the bond market.

In general, Dinani said, the lowered fixed rates is another sign of a market cooldown after a hot decade in real estate.

“The market needs some good news, particularly in Vancouver,” he said. “We’ve had tremendous run-ups in our market since 2009 that a cooling period now is very welcome.”

Just Posted

B.C. BUDGET: Surplus $374 million after bailouts of BC Hydro, ICBC

Growth projected stronger in 2020, Finance Minister Carole James says

Social media influencers promote Fernie

MountainGirls, The Lady Alliance founders stop in Fernie on western Canada RV tour

Elk Valley mine deaths prompt safety initiatives

Teck produces educational video, introduces new procedures after contractor drowns at Fording River

Fernie SAR rescues stranded snowmobiler; buried skier

Skiers caught in Mt. Fernie avalanche; snowmobiler spends night in backcountry after breakdown

Elk Valley RCMP issues 40 traffic tickets in 21 days

Logging truck driver fined after trailer wheels catch alight

‘Riya was a dreamer’: Mother of slain 11-year-old Ontario girl heartbroken

Her father, Roopesh Rajkumar, 41, was arrested some 130 kilometres away

GALLERY: Fernie Ghostriders get their home game mojo back

Riders post 6-1 win over Columbia Valley Rockies; prepare for playoffs

Do you live with your partner? More and more Canadians don’t

Statistics Canada shows fewer couples live together than did a decade ago

B.C. child killer denied mandatory outings from psychiatric hospital

The B.C. Review Board decision kept things status quo for Allan Schoenborn

Searchers return to avalanche-prone peak in Vancouver to look for snowshoer

North Shore Rescue, Canadian Avalanche Rescue Dog teams and personnel will be on Mt. Seymour

Market volatility, mortgages loom over upcoming earnings of Canada’s big banks

Central bank interest hikes have padded the banks’ net interest margins

Hearings into SNC-Lavalin affair start today, but not with Wilson-Raybould

She has repeatedly cited solicitor-client privilege to refuse all comment

VIDEO: 8 things you need to know about the 2019 B.C. budget

Surplus of $247 million with spending on children, affordability and infrastructure

B.C. pot giant Tilray to acquire hemp food company Manitoba Harvest for up to $419 million

Tilray will pay $150 million in cash and $127.5 million in stock.

Most Read