Don't wait too long to lock-in your Mortgage Rates

(August 23, 2012 )

We all know that mortgage rates have been at historically low levels, so many of us are taking the wait and see approach to locking in our mortgage rates.  But don't wait too long, or you might be locking in rates that are way above what you could have gotten.

Those of us who have our mortgages in floating variable rates are probably benefiting from very low interest rates.  However, did you know that FIXED term rates often move up faster and before variable rates do? 

Fixed mortgage rates follow the bond yield rates.  Long story short, fix rates can creep up over time without you knowing it.  By the time your variable rate starts to climb, and you decide to lock your rate into a fixed term (3yr, 5yr, etc.), you will already be facing much higher fixed mortgage rates.

Article from the Vancouver Sun this week:

RBC Royal Bank raised two of its mortgage rates by one-fifth of a point each on Tuesday, and it’s likely other lenders will soon follow suit, an economist told The Sun. Helmut Pastrick, chief economist at Central 1 Credit Union, said bond yields have gone up by about 0.3 per cent in the past four weeks, and that is probably driving the increase.

Talk to your financial advisor or bank to learn more about your mortgage rates.