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Forums » Real Estate Review » what will happen with fixed rates[Reply]
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Author Message
Joined: 8/29/2006
Posts: 16
Posted on Tuesday, March 18, 2008 3:02:42 PM
  [Quote]
The U.S. Federal Reserve cut it's discount rate 1/4% . That almost never happens.
As for the Bank of Canada, they will set their rates independently of the U.S. Fed, says Governor Mark Carney. That means the BoC will probably cut less aggressively at it's April 22 meeting--but who knows in this turbulent market.
As of this writing, the 5-year bond yield has fallen to a new multi-decade low of 2.74%. The 5-year fixed/5-year bond spread is now a stratospheric 4.55%. (About 2.50% is typical.) That means fixed-rate mortgagors are paying far more interest than they would in normal circumstances.
When will fixed rates improve? No one knows. I want to believe that spreads will narrow soon and fixed rates will fall, but there is absolutely no indication of when that will happen.

Sincerely,

Nune Mirabyan

Mortgage Edge
Park Place Corporate Centre
210-15 Wertheim Court
Richmond Hill, Ontario L4B 3H7
Fax:905 883 4161
Cell:416 500 1657

Email:[email protected]
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Forums » Real Estate Review » what will happen with fixed rates[Reply]
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