A few records have been set, oddly, in this pandemic year, including for housing sales, and now Canadians have access to what\u2019s believed to be the lowest variable-rate mortgage in the country\u2019s history.<\/p>\n
just rolled out a 0.99% variable rate on insured mortgages that has already, according to a couple of mortgage brokers, drawn intense interest from the public. Although the mortgage may not be suitable for investors, another low rate is available to them.<\/p>\n
\u201cWe have mortgages that suit many of our clients\u2019 needs. Our 0.99% rate is available for high-ratio owner-occupied properties, but for those looking for a mortgage for an investment property, we also have a low five-year variable rate at 1.39%,\u201d Barry Gollom, HSBC\u2019s senior vice president of products and propositions at HSBC Bank Canada, said in a note.<\/p>\n
The penalty on variable-rate mortgages also makes HSBC\u2019s offering that much more enticing, says , who noted that insured mortgages can\u2019t exceed $1 million.<\/p>\n
\u201cA sub-1% variable-rate mortgage in Canada is pretty insane,\u201d said the Rock Capital Investments broker. \u201cThe penalty on variables is only three months of interest, so you\u2019re far ahead on the rate.\u201d<\/p>\n
However, Johanis noted that HSBC mortgages aren\u2019t available to the mortgage broker channel, which means that potential borrowers have to secure the rate themselves, and the popularity of this new mortgage product has resulted in wait times in excess of three hours.<\/p>\n
With rates slated to remain low through 2023, , chief operating officer of Matrix Mortgage Global, doesn\u2019t think the 0.99% variable-rate mortgage product is wise in the long run. Moreover, she estimates that only about 10% of borrowers would qualify for it.<\/p>\n
“The main thing now is, because we’re seeing a 0.99% variable, if you look at a fixed-rate mortage they’re as low as 1.39%, so you’re not going to outcompete the fixed rate in the long run,” said Martin. “Long-term, the banks will absolutely raise the prime lending rate as soon as the economy stabilizes. Fixed-rate mortgages are tied to the bond market, so even mortgage refinances would be better off with the 1.39%. Historically, variable-rate mortgages have outperformed fixed in the long term because the spread is larger, but not on this run, as the spread is only 1\/16 of the average.”<\/p>\n","protected":false},"excerpt":{"rendered":"
A few records have been set, oddly, in this pandemic year, including for housing sales, and now Canadians have access to what\u2019s believed to be the lowest variable-rate mortgage in the country\u2019s history. just rolled out a 0.99% variable rate on insured mortgages that has already, according to a couple of mortgage brokers, drawn intense […]<\/p>\n","protected":false},"author":6,"featured_media":27311,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8895"}],"collection":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/comments?post=8895"}],"version-history":[{"count":2,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8895\/revisions"}],"predecessor-version":[{"id":23019,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8895\/revisions\/23019"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media\/27311"}],"wp:attachment":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media?parent=8895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/categories?post=8895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/tags?post=8895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}