(originally sent by email on Wednesday morning, September 17th)
Sorry, I was just trying to think of a clever way to get you to open my email, amongst all the other mortgage broker emails that are bound to hit your email inbox today.
I will tell you though, 2.89% for a 5 year fixed term may not be too far off. So I wasn’t completely lying to you. You’ll just have to wait a……….certain amount of time, before we hit that mark, once again.
Keep reading below today’s news and you’ll know exactly what I’m talking about. Heck, go ahead and bookmark this email (or website), and come back to it later on, if it’s too much to digest in one sitting.
And while I don’t have 2.89% 5 year fixed right now (sorry for the bait and switch), the current rate specials are pretty darn good, which you’ll find further down.
Right now it’s Tuesday evening around 8pm. I have the outline of this email done, but it’s nowhere close to being completed. I guesstimate I’ll be at it until around 12am or maybe even 1am. So I’ll allow myself a sleep in tomorrow morning, while y’all are reading this (hopefully).
Anyways, this is just a WILD guess, but anytime now the BoC is going to be lowering the overnight lending rate by 0.25%, or maybe even 0.5% (more doubtful, but not impossible by any stretch).
That will give us a bank prime rate of 4.70%, or maybe even as low as 4.45%.
DISCLAIMER! I might be wrong! If the BoC does what is completely unexpected and doesn’t lower the overnight rate, well…………..I’ll be wrong! And I’ll be the first to admit it, in the next email. But I don’t think I’m wrong.
The Bank of Canada’s primary concern is keeping our economy strong, with a minimal amount of people unemployed. Our economy is also supposed to grow, albeit at a slow pace.
Because our most recent jobs report shows an increasing unemployment rate, PLUS our GDP has gone into NEGATIVE territory, we can predict that our economy is in fact heading towards a recession. (A recession being defined specifically as 2 quarters with negative GDP).
With signs of a recession looming, the BoC will most likely do what it can to breathe some life into the economy. A rate drop is just what the doctor ordered.
I personally can’t stand the “here’s what it means for you” emails, because they lack creativity. I’m trying to make boring mortgage broker emails, well, not boring.
But on the same token (or is it opposite token?), what’s the point of me sending out a news email and not telling you what this means, for you? I’d be neglectful in my job as a good broker if I didn’t tell you what the rate announcement means today. So, here goes:
Simply put, if you already have a variable rate mortgage, the rate of interest that you pay is going down. What about your payments? Are they going down? Well, it depends on your lender. If your variable mortgage is an ARM (adjustable rate mortgage), your payments are most likely going to change to reflect the new rate. Your amortization remains constant.
If you are in a VIRM, (or VRM), your payments may not change, but the amount that goes towards principal on your mortgage will increase, thereby effectively decreasing your amortization.
If you’ve had a mortgage for some time, you already know what your lender is going to do, based on previous rate increases and decreases. If you’ve just received your new variable mortgage, then maybe check the wording of your contract and see if you can find out if it’s a VRM or an ARM. A good broker or banker should have told you.
This is where it gets a tad tricky.
If you’re in the midst of applying for a mortgage, and you’ve indicated to us that you want a variable rate, then there is no more action required on your part. You will be benefiting from the mortgage rate change, but really, only if we’ve locked in the spread that the bank will be offering. Generally, your spread is locked in once we’ve submitted your application. If we didn’t submit your application yet, it’s not locked in (and can change on a whim).
If you’re applying for a fixed rate and want to change to the variable rate, just call us and ask us what we think your current variable offer is going to be. That is, variable rate spreads cannot be held with pre-approvals or rate holds, and the spreads the banks are offering can change on a whim. So do call us asap if you do want the variable rate (or simply REPLY to this email). 250-858-7160
Some of you by now might be getting tired of my jib jabbering on, and just want the rate specials. Just Gimme The Rates and Stop Talking, OK Man?
3 year, fixed, high ratio purchases and switches: 3.69%
3 year fixed, conventional purchases and refinances: 3.99%
5 year variable, high ratio purchases: P-1.00% (So your rate is going to be whatever prime rate is as of today, minus 1.00%)
(on approved credit, rates subject to change anytime without notice)
I’ve always said that when we have an offering of -1.00% on variable, jump at it. That spread is damn good. Just last week, my best variable rate spreads were around P-0.70%. What a nice email from the lender to receive and tell me (that for certain applications only), they can grant P-1.00%.
The super amazing variable rate is granted on a case by case basis. But if your mortgage is large enough, and if it’s high ratio, then you can bet I’m going to get you that rate, or darn close to it.
As I said, this kind of rate special can be gone before I say, BOO! So if you want to know if you can get in on this, don’t wait, call or email me, TODAY!
If you’re still more than 2 weeks out from your purchase, refinance, or renewal, it’s not too late to take advantage of our rate special. Don’t be resigned and accept that you can’t get the lower rate. You still can.
Here’s what your broker or bank wont tell you about it: Because they already have you approved at the rate they got you at time of approval (let’s say 4.24%), they can’t often pivot and give you the lower rate. Or, they just don’t want to.
But I can.
So hun, you do whats best for you. It’s OK to breakup with your bank or other broker if they can’t get you that deliciously low rate special. Don’t settle unless it’s the best you can get.
Call me (2508587160), and I’ll tell you in about 15 minutes if we can do it, or, if your stuck where you’re at.
Now, back to that mention of the rate at 2.89%.
Back in 2019, I remember getting a mortgage for a realtor partner of ours. She had sent us a lot of business, so I wanted to really go to bat and get her an awesome rate. Lucky for me at the time, the BIG RED BANK came out with an eye popping special. It was 2.89%.
She exclaimed that anything under 3% was a big win, and she gladly signed at 2.89%. I remember being on a walk around my neighborhood and on my cell, speaking with her (I’m often walking or pacing when I talk on the phone).
Anyways, the months leading up to this 2.89% phenomenal rate felt eerily similar to today. Trump was in office. Rates were on their way down after a heightened cycle. We didn’t know or suspect that rates were going to continue dropping to crazy new lows after that due to COVID, but at the time, 2.89% was a very, very good rate.
It’s Just A Hunch. But I do think our fixed lows are going to come in at around 3% for this cycle. Will we hit 1.75% fixed, again? Probably not, unless there is another massively impactful event on our economy, like COVID. But even if there was, I think the BoC will have learned their lesson, and not drop rates to near 0% on the overnight lending rate for fear of re-igniting inflation.
I’ve been a banker through a few cycles now. While economists pontificate this or that prediction based on current information, I’ve come to realize that they’re wrong half or 3/4 of the time, either on the timing of the rate drops, or how low the rates will go. So I read everything they throw at me with a grain of salt.
While some people might scoff at me and say I have no basis for telling them that the fixed rate lows are going to be at 2.89%, I say, that this is quite possible, or actually, probable.
You see, I don’t think rates are going to drop as low as 1.75% again. I also don’t think we’re at the low point right now. I think it’s going to end up in the middle, somewhere. 2.89% might not be it, but it might not be far off.
I think we’re about 6 months, to 1 year, to 1.5 years away from it. Why the hesitation in predicting the WHEN? Because rates are reactionary to what happens in the economy. So WHEN stuff happens determines WHEN the rates will be dropping.
No, it’s not breaking news if the BoC lowers rates, this time or that time. So when you see your inbox getting flooded with emails today from other brokers, remember that they’re only using this as an opportunity to sell you on their services. Easy enough for anyone junior to spout off the news and come off as on top of things, educated, whatever.
Fact is, one rate drop is not going to dramatically alter your financial future.
When push comes to shove, getting enough money on your approval, avoiding last minute stresses (as much as possible, anyways), understanding if your decision is a good one or not, hearing confidence in your mortgage broker, getting real and good LONG TERM advice, and yes, getting you a good low rate, DO matter.
While any junior can send you their canned email, most of them can’t do what we do, everyday.
We provide confidence when you’re applying for your mortgage.
We provide good advice and strategy when applying for your mortgage.
We get it done, EVERY. TIME.
We try and do it without last minute stresses (disclaimer, it still happens to the best of us).
When something stressful happens, we provide calm and assurance.
We get it done, everytime.
Just look at three of our most recent reviews from clients, and decide for yourself.
Things area already uncertain enough. Tariffs, politics, wars, rate hikes, rate drops, AI, weather changes, economic uncertainty.
Stick to the principles. Be conservative in your investment and debt decisions. And deal with the professionals, because it’s the experienced professionals that get it done.
For your mortgage, that’s us. Just check out the reviews below, and don’t wait too much longer before the rate specials disappear. Just hit “reply” to this email. Or, if you’re reading this online, fill out the contact form, and let’s talk.
Signing Off For Now,
David Steinberg, Banking Veteran and Long Term Strategist
Owner, Lead Broker
Olympic Mortgage
My Contact: david@olympicmortgages.ca. 250-858-7160
As always, feedback is very appreciated!
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