(Unsplash)

Drop in fixed mortgage rates a ‘welcome cooling period’: real estate agent

Major banks dropped their rates this week

A slight downturn in mortgage rates shouldn’t send prospective buyers into a tailspin, according to a Lower Mainland Royal LePage advisor.

At least two of the country’s main banks, the Royal Bank of Canada and the Bank of Montreal, lowered their five-year fixed mortgage rates this week.

Adil Dinani said the fixed rate depends on bond yields, and “when the bond yield goes down, rates go down.”

The Bank of Montreal dropped its rate by 0.15, down to 3.74 per cent.

“It’s so marginal that it doesn’t really have a material impact on how much money they’re going to lend or how many people buy homes,” said Dinani.

But it does is a “psychological effect,” he said, as some homeowners look to swap from variable rates to fixed ones.

The reason behind the potential swaps is that variable rates are affected by the Bank of Canada prime rate, which has gone up 1.25 per cent in the past year and a half.

Fixed rates are unaffected by that and are instead tied to the bond market.

In general, Dinani said, the lowered fixed rates is another sign of a market cooldown after a hot decade in real estate.

“The market needs some good news, particularly in Vancouver,” he said. “We’ve had tremendous run-ups in our market since 2009 that a cooling period now is very welcome.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

From baseball stars to forest fires: Southeast Fire Centre water bomber has an interesting past

Tanker 489 is stationed in Castlegar this year, but in the 1960s it belonged to the L.A. Dodgers.

Survey, hotline launched amid probe into racist blood-alcohol guessing game at B.C. hospital

Mary Ellen Turpel-Lafond has been appointed to lead an investigation by Health Minister Adrian Dix

Morning Start: Naps could save your life

Your morning start for Wednesday, July 9, 2020

From Mountains to Prairies another example of Golden’s local music talent

The band is slotted to perform at next Wednesday’s edition of Summer Kicks

Kicking Horse Movies reopens in time to celebrates 70 years

After a lengthy layoff due to COVID-19 the theatre is open to the public once more

Canadian policing organization calls for decriminalization of simple illicit drug possession

Canadian Association of Chiefs of Police want policing focus of opioid crisis to be replaced with a health one

Pure magic: live performances revived in Revelstoke

Revelstoke Arts Council hosting Guerrilla Gigs on Wednesdays all summer long

Penticton photographer publishes book showcasing resilience of Okanagan people

Okanagan Strong showcases the bravery of many during crisis; from COVID-19, to floods, and fires

Summerland steam train to begin operations

Reduced schedule, physical distancing planned for Kettle Valley Steam Railway beginning July 18

B.C. appeals judge’s decision to leave three clubhouses in Hells Angels hands

The province has filed two notices of appeal related to the B.C. Supreme Court decision

Kelowna woman shares story of alleged dog attack

Resident Yuli Lavigne alleges the incident happened on Monday, July 6

Conservation officers relocate Spirit bear known to roam northwestern B.C.

Bear roamed valley north of Terrace for many years

Successful first week for Okanagan ride-sharing, service expansion underway

The service is expanding to Peachland, Lake Country, Penticton and Vernon by the end of July

B.C. premier applauds call to decriminalize drug possession

Police shouldn’t struggle with health issues, Horgan says

Most Read