Eye-Catching Six-Month Mortgage Rate: Tempting With a Twist
There was minimal movement observed.
mortgage rate
Leaders this week saw minimal movement with just two of the lowest national advertised rates deciding not to change.
- The standard insured two-year fixed rate increased by five basis points to 4.04 percent.
- The uninsured five-year hybrid increased by two basis points to reach 4.44 percent.
Typically, we don’t monitor six-month interest rates, but an enticing proposition from True North Mortgage warrants attention. They’ve dropped their six-month insured fixed rate down to an impressive 1.99 percent. However, there’s a caveat: you must renew with them at a markup of 10 to 50 basis points above their displayed rates, or pay a one-percent fee instead.
The primary advantage of six-month mortgages is easier qualification since they necessitate a lesser stringent government ‘stress test’ (assuming current interest rates remain constant). This means you aren’t required to demonstrate that you can manage payments at an excessively higher rate.
interest rate
This indicates that you have the option to borrow additional funds.
Regarding affordable financing, real estate investors would love to see 1.99% mortgage rates at this moment, especially in challenging markets such as Toronto. However, the rate fairies aren’t likely to provide any miracles anytime soon.
Bond yields
,
core inflation
And price expectations are all increasing. Even worse, the breadth of inflation—which measures the portion of consumer prices rising by more than three percent annually—stands at nearly 40 percent, as reported by Statistics Canada. This figure is significantly higher compared to pre-pandemic levels and serves as a warning sign.
Bank of Canada
.
In some previously struggling housing markets across the country, property values are beginning to show renewed strength. According to data provided by the digital real estate company Wahi, the median home price in the Greater Toronto Area has increased by 3.1 percent during the initial 15 days of this month compared to April. However, sales have dropped by 51.8 percent when contrasted with the first 15 days of May 2024, and the number of active listings has risen by 50.5 percent year over year.
Despite experiencing instances of buyers disappearing on them, current homeowners in most marketplaces continue to stay optimistically resilient, declining to accept underpriced proposals.
Robert McLister
serves as a mortgage strategist, an interest rate analyst, and is also the editor of
MortgageLogic.news
. You can follow him on Twitter at
@RobMcLister
.
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