Breaking News: 5-Year Fixed Mortgage Rates Drop Below 4%!
October 7, 2024

5-year fixed mortgage rates drop below 4% in Canada for the first time since 2022. Find out how this impacts Calgary and Edmonton mortgages and interest rates.
Mortgage rates drop below 4% sale announcement.

Exciting news for homebuyers and homeowners in Canada! For the first time since April 2022, a major lender has reduced its 5-year fixed mortgage rate to below 4%. This significant development could be the perfect opportunity for those looking to purchase a new home or renew their mortgage. Watch the video below to get all the details and insights.

Thank you for tuning in! Navigating the mortgage landscape can be complex, but my team and I are here to help. Don’t hesitate to reach out with any questions or comments. We’re committed to guiding you through these evolving financial times.


Transcript:

5-Year Fixed Mortgage Rates Drop Below 4% Since April 2022

Five-year fixed mortgage rates have dropped below 4% from a mainstream, reputable lender for the first time since April 2022.

While five-year fixed-rate mortgages under 4% have been available from a few niche discount brokers, for the first time in 30 months, we now have a five-year fixed interest rate under 4% from a major lender.

ATB 3.99% five-year fixed rate offer

ATB Financial Lowers Rate to 3.99%

ATB Financial, or Alberta Treasury Branch, just lowered its five-year fixed rate to 3.99% for insured purchases and renewals! This is huge. Interestingly, it happens a couple of days after a few lenders increased their rates following an unexpectedly good jobs report in the U.S. that has pushed not only the U.S. 10-year treasury bond but also the Canada five-year government bond up.

US economy added 254,000 jobs last month.

Impact of Bond Rates on Fixed Mortgage Pricing

Bond rates, which have a high correlation with fixed-rate mortgage pricing, move all the time, so it remains to be seen if this most recent spike sticks. Could we see interest rates rise? How long will ATB Financial hold onto this rate under 4%? Not sure.

Time to Secure a Rate Hold

Now might be the time to grab a rate hold for any of you looking to buy in the coming months. This rate hold is good for four months.

Canadian bond yields rise 30 points chart.

Short-Term Effects on Fixed Rates

I don’t think we’re going to see the bond rate high for very long, but in the short term, it has definitely had an impact with some lenders on their fixed rates, with some lenders above 4.5% now.

The U.S. Jobs Report and Potential Revisions

This is all because of unexpectedly high jobs numbers released in the United States last week. However, analysts have noticed a very low response rate on the survey that led to this number. Only 62% of the businesses in the sample actually filed their responses on time, which is the lowest of any September report in 22 years. So we will likely see a downward revision of these numbers over the coming weeks. Downward revisions—or sometimes upward revisions—happen often with these reports. The downward revision will likely bring these numbers more in line with the U.S. consumer confidence report, which showed U.S. consumer confidence fell in September, with the main area of concern being jobs. This mismatch will likely come closer to matching once the updated numbers come in.

Fixed vs. Variable Rates: What’s the Best Choice?

For now, if you can snag a 3.99% 5-year interest rate, that might be better than a variable interest rate of around 5.5%. Even with 2% of interest rate drops in the forecasts, we really don’t know how long that will take, but you can save money starting on day one of a mortgage if you lock this rate in—or hope to save enough later in the variable rate term to make up the 1.5% spread in rates right now.

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It is complicated. Please comment or click through to my website if you want to connect or ask any questions. My team and I are here to help you navigate this very complicated time.

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