Mortgage shoppers have been treated to fixed rates near two-year lows for months now. They’re even below most variable rates.
But how long can these fixed-rate bargains last? That’s the $64,000 question—and one that’s being raised with increased frequency after bond yields surged more than 30 basis points in less than a week earlier last month.
Bond yields generally lead fixed mortgage rates, so naturally expectations have risen that fixed rates will start to rise from their multi-year lows.
Yet, while some lenders have started hiking their fixed rates in recent weeks, there’s been no movement en masse so far.
This all begs the question: should mortgage shoppers secure today’s low rates while the getting is good, or hold out in the hopes that they continue to fall further?
Dave Larock of Integrated Mortgage Planners sees any fixed rate hikes as being short-term in nature.
“The recent surge in the five-year GoC bond yield means that five-year fixed mortgage rates will likely increase over the short term,” Larock wrote.“I think that any run-up in yields won’t be sustained. If I’m right, borrowers who need to secure an approval today should check their mortgage contract to confirm whether their lender will lower their rate if it drops in the time between when they are approved and when their deal closes.”