If you’re an economic news junkie like me, you’ve likely already noted that bond yields have increased massively in the past two days.
Our previous post on fixed rate spreads indicated that, if bond yields go up, fixed rates usually go up too – depending on the spread between the 5 year yield and 5 year rate.
It turns out that yields have gone up quite quickly because the market feels that there have been some really good indicators of a strong recovery.
All of this is great news! Right? Well, not so fast. While it’s fantastic to hear about an economic recovery in Canada, and more specifically here in Alberta, it’s not necessarily great news if you’re shopping for a mortgage.
The reality is this: rates go up when the economy improves. The long and the short of my point is this: If you want to get a mortgage in the next four months, then RUN, don’t walk, to your nearest independent mortgage brokerage (hint, I know a good one!) and get a mortgage pre-approval as soon as humanly possible.
If you think I’m joking, consider this: Royal Bank increased their 5 year fixed rate to 4.54% today. Ouch. That’s a lot higher than 3.84% which is currently available through our brokerage…but don’t be surprised if our lenders increase theirs soon too.
Get ‘em while they’re hot!