This rate is worth it’s own blog post!

Currently on RateSupermarket.ca (Monday November 21, 2011) you can get a 5 year fixed mortgage rate for only 2.99%.  Yes you heard right, 2.99%!  The offer is only available to Ontario residents and comes with a 21 day rate hold. It also allows for 20% annual lump sum payments and a 20% increase on your monthly payments – two features that allow you to pay off your mortgage faster and save loads on interest.

5 year bond yields, which are closely aligned to the 5 year fixed mortgage rates, have dropped over 40 basis points since the end of October.  With fixed mortgage rates under 3%, this makes variable mortgage rates look less attractive.  Why not pay a few extra basis points for the security of knowing what your monthly mortgage payments will be for the next 5 years?

It looks like Dr. Ian Lee had the right idea when he submitted his mortgage rate outlook for November!

It looks at the biggest question people are facing right now if they’re in the market for a mortgage: with fixed rates so low, does it makes sense to lock in your mortgage now for 7-10 years, or is the premium over variable mortgage rates too high to make sense?

The lowest 7 year fixed rate listed on RateSupermarket.ca is currently ING @ 5.25% and the best 10 year is 5.35%. With 5 variable rates at 1.95%, you would be paying a hefty premium for the security of knowing your ongoing payments for the next 7-10 years, but the article goes on to say, the best option really depends on what your risk tolerance is.

As always speak to a mortgage expert before making any decisions.