August 3, 2016 Best Mortgage Rates Update

Low interest rates and the massive increase in housing costs are driving a building boom in Victoria.

August 3, 2016 Best Mortgage Rates Update:

Construction Boom Hits Victoria:

For those clients that don't know, I am at the beginning of a new build construction project - building a new house to accommodate my growing family! Although we're right at the beginning of the process, it's clear that the building industry is in boom mode. Trades-people are busy, difficult to track down and prices are clearly higher than they were a few years ago. The photo in this post is from the Lehigh yard at about 1:30pm the other day - the yard is absolutely stuffed with dump trucks picking up aggregates. 

Seems like the mix of the high cost of housing, insatiable demand, low supply and low interest rates have created the perfect storm!

Mortgage Rates:

Overall, mortgage rates have stayed relatively stable over the last few weeks.

Best fixed rates still range from 2.44-2.59%.

Some full featured quick close variable rates are closing in on P-0.5% (2.25%) and some low basic rate products are digging into P-0.55% (2.15%) territory.

I've seen some improvement with the big banks like RBC - with clients showing me their pre-approvals. Still, they are generally all over the place, with renewal notices being unusually greedy. If you have a renewal notice, be sure to check out available rates elsewhere - a few hours spent with a mortgage broker could save you some serious cash.

Credit unions are still very much in the game... offering some of the best rates in the industry. Best credit union option for a 5-year fixed is currently is Coast Capital at 2.44% for high ratio deals, and 2.64% for conventional deals. There are several other credit unions sitting between 2.69% and 2.79%, which still beats the offerings of RBC and CIBC! Coast Capital is also offering a $1000 to be used in a registered investment product of your choice, and $500 towards legal and appraisal fees to first time homebuyers.

5 Year Fixed Rates5 Year Variable RatesHELOC
Quick Close Specials2.44% - Must Close within 45 Days - High Ratio Only P-0.45% (2.25%) 45 Day CloseP +0.5%
Best Standard Rates2.49% - High Ratio - 90 Day Close 2.54% -Conventional - 120 Day CloseP-0.45% (2.25%)P +0.5%
Low Rate Basic Products2.44% -Must Close in 120 Days - High Ratio Only 2.54% - Must Close in 90 Days - ConventionalP-0.55% (2.15%) - Must Close in 90 Days - High Ratio Only P-0.4% (2.3%) - Must Close in 90 Days - Conventionaln/a
Credit Unions2.64% - Conventional 2.49% - High RatioP-0.35% (2.35%)P +0.5%

* Low Rate Basic Products have great rates, but have restrictions that include high discharge penalties, inability to blend mortgage rates if you sell & buy, inability to leave lender during term, etc.

Other Rates:

Lender Prime2.7%
Bank of Canada Key Overnight Lending Rate0.5%
Next Bank of Canada Rate Update September 7, 2016
Benchmark Rate4.74%
5 Year Government of Canada Bond Yield (Aug 3, 2016)0.65%

Mike Grace is an independent full-time mortgage planner and industry insider located in Victoria, BC. If you are purchasing, refinancing or renewing your mortgage, contact Mike to obtain the best available rates and terms.