RateSupermarket.ca’s Expert Panel Believes Lenders will Keep Rates Steady
TORONTO, Sept 13, 2011… The experts have spoken and the common theme for this month’s RateSupermarket.ca Mortgage Rate Outlook is higher margins.
Variable mortgage rates increased last month and most of the Big 6 Banks only recently reduced their fixed mortgage rates despite a huge drop in bond yields over the past several weeks. Lenders are still enjoying mortgage spreads near historical highs.
Ultra low mortgage rates have resulted in unsustainable profitability so lenders are happy with increased margins. As a result, our Panel believes that fixed and variable mortgage rates will stay where they are for the time being.
Fixed mortgage rates: Unchanged
Many non-Big 6 mortgage lenders dropped their fixed mortgage rates weeks ago, while the major banks only started to drop rates slightly this week. Following positive third quarter results from most of the banks, it seems most will continue to pad their margins versus pushing further into the rate war and going for market share.
Our Panel believes fixed mortgage rates will not change significantly in the next few weeks.
Variable mortgage rates: Unchanged
Variable mortgage rates increased last month as lenders reduced their discounts to Prime citing unsustainable margins. This move followed the Bank of Canada announcement that interest rates will remain unchanged and the consensus is that this will continue for the rest of the year.
Other lenders started to follow suit and cut their discounts to Prime as well, but our Panel of experts don’t see any more changes to variable mortgage rates in the short term.
To read all the detailed commentary from our panel members, please visit:
About the Mortgage Rate Outlook Panel
The panel includes some of the country’s top mortgage experts, and helps Canadian consumers make informed decisions by offering a short-term outlook for fixed and variable mortgage rates.
This month’s panel members:
- Mark Kocaurek, Senior Vice President, Treasury & Lending (Chief Lending Officer) of ING DIRECT Canada
- Dr. Ian Lee, Director of MBA Program, Sprott School of Business, Carleton University
- Dan Eisner, MBA. AMP. President, Verico True North Mortgage
- Wayne Spinney, Mortgage Agent, Centum Mortgage Professionals
About RateSupermarket.ca (www.ratesupermarket.ca)
RateSupermarket.ca is the largest independent and impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy to use comparison engine provides much needed transparency to the Canadian financial market and allows visitors to quickly find the best rates. Their new Mortgage Tool App for the iPhone also allows house hunters to compare mortgage rates using their Smartphone. Over 1.5M Canadians have turned to RateSupermarket.ca to save money on their mortgage, insurance, credit cards and GICs.