The gap between variable and fixed mortgage rates is narrowing

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Floating-rate borrowers got their Christmas bonus from the Bank of Canada on Wednesday: a half-point drop in their borrowing costs.

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That has many mortgage buyers looking for cheap flexible deals. The lowest nationally advertised prices now start at:

• 4.25 percent if insured, or 1.20 percent deductible (from Pine.ca)
• 4.75 percent if uninsured, or minus 0.70 percent (also from Pine.ca).

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The best advertised home equity lines of credit (HELOCs) are down to 5.95 percent, or prime plus 0.50%. But if your credit shines better than the bank’s shoes, you can negotiate in principle and 0.25 with major banks, or even further (5.45 percent).

Hybrid mortgages, where half of the loan is fixed for five years and half is flexible, now down to 4.76 (uninsured) and 4.51 percent (insured). Scotiabank eHOME leads the way in that product, which suits commitment-phobes well.

In the fixed rate department, the Bank of Canada’s cuts this week took variable rates to within 36 basis points or less of the lowest fixed offer advertised nationally. That’s the narrowest spread between the two since November 2022. We’ll see if that’s enough to get more interest from borrowers, given all the rate uncertainty looming over next year.

Finally, if you’re after a fixed price with insurance in BC, the Vancity’s impressive 3.89 percent premium turns heads faster than a Ferrari in a minivan convention. In Alberta, ATB Financial has a below-market rate of 3.99 percent, and in Ontario, online discounter Butler Mortgage leads the charge at 4.09 percent.

Housing prices

The rates shown below are updated at the end of each day and are taken from the Canadian Mortgage Rate Survey produced by MortgageLogic.news. Postmedia and the Imaginative. Online Inc., the parent of MortgageLogic.news, is compensated by certain mortgage providers when you click on their links in the charts.

Can’t view the charts on this page? Try clicking here.

Robert McLister is a mortgage strategist, interest rate analyst and editor for MortgageLogic.news. You can follow him on X at @RobMcLister.

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