(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

Port Hardy RCMP discuss reconciliation with First Nations

The RCMP “want to be emotionally respectful of the past while still trying to uphold the laws.”

VIDEO: Wounded Warrior Run leaves Port Hardy on eight-day trek down island

The team’s fundraising goal this year is $250,000, which is double last year’s goal.

Claims already being staked after GeoScience BC report released

In the first 15 days following the report, a total of 34 new claims were staked.

Bradshaw’s Photo Highlight: Waulkwass River

A kingfisher and some trumpeter swans came by close enough to get a few shots.

Port Hardy RCMP investigating drug offences

Both vehicle occupants may face future charges related to the suspected drugs and cash.

VIDEO: Feds warned agricultural sector near ‘tipping point’ due to blockades

Canadian Federation of Agriculture points to lack of propane and feed due to Coastal GasLink dispute

B.C. terminates contract with hospice society refusing assisted death

Delta Hospice Society loses hospital service fund of $1.5 million

Island woman’s tats put her in the running for $25,000 prize and Inked magazine cover photo shoot

Chemainus Secondary grad and Ladysmith resident a strong contender in voting

Seven arrested at blocked rail line in northern B.C., police say

But a Gitxsan hereditary chief says 14 were arrested, as fight over natural gas pipeline continues

Hospital parking fees needed, but changes to payment system possible, health minister says

B.C. health minister Adrian Dix says hospital parking doesn’t need to be so stressful

Protecting privacy key to stopping spread of COVID-19, B.C. health officials say

The number of coronavirus cases in B.C. remains at seven

IHOP to host seventh annual National Pancake Day

IHOP will be offering free short-stack pancakes in support of BC Children’s Hospital on Tuesday

Most Read