It’s war. Mortgage war. And you could be the winner. - MoneySense

It’s war. Mortgage war. And you could be the winner.

The banks may be gearing up for the busy spring real estate season and Minister Flaherty isn’t too impressed, but you should be.

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BMO threw down its mortgage gauntlet on Friday, with a rock-bottom five-year fixed-rate at 2.99% (down from 3.09%), effective immediately.

The rate drop is reminiscent of the bank’s 2012 attempt to win mortgage seekers during the busy spring real estate season. The move sparked a mortgage price war and prompted admonishments from an angered Finance Minister Jim Flaherty.

This time is no different, with Flaherty issuing a harshly worded statement about the expectations of prudent lending by Canada’s banking system.

The good news is that anyone currently shopping for a mortgage will end up with even lower rates. And that includes me.

Of course, there’s more to selecting a mortgage than a low rate, but it does prompt the question: how much have rates shifted over the decades?

While data on discounted mortgage rates—the posted rates minus discounts offered by banks and A-lenders to good, qualified credit borrowers—is not readily available, the Canadian Mortgage and Housing Corporation collected data on posted mortgage rates going back to 1951. Just to clarify the posted rate is the rate banks offers before discounts. The current posted rate is 5.24%.

Below is the average posted rate going back to 1951:

2012 4.24 %
2011 4.57 %
2010 4.82 %
2009 5.05 %
2008 6.41 %
2007 6.36 %
2006 5.98 %
2005 5.48 %
2004 5.80 %
2003 5.99 %
2002 6.70 %
2001 7.18 %
2000 8.20 %
1999 7.39 %
1998 6.90 %
1997 7.07 %
1996 7.94 %
1995 9.22 %
1994 9.34 %
1993 8.70 %
1992 9.52 %
1991 11.16 %
1990 13.24 %
1989 12.05 %
1988 11.60 %
1987 11.14 %
1986 11.22 %
1985 12.18 %
1984 13.61 %
1983 13.29 %
1982 17.89 %
1981 18.15 %
1980 14.32 %
1979 11.98 %
1978 10.59 %
1977 10.36 %
1976 11.78 %
1975 11.43 %
1974 11.24 %
1973 9.59 %
1972 9.21 %
1971 9.43 %
1970 10.45 %
1969 9.84 %
1968 9.06 %
1967 8.07 %
1966 7.66 %
1965 7.02 %
1964 6.97 %
1963 6.97 %
1962 6.97 %
1961 7.00 %
1960 7.18 %
1959 6.98 %
1958 6.80 %
1957 6.85 %
1956 6.23 %
1955 5.88 %
1954 6.01 %
1953 5.97 %
1952 5.77 %
1951 5.46 %

According to Robert McLister, editor of canadianmortgagetrends.ca, the discounted five-year fixed rates were as follows:

2011: 3.49% (posted rate minus 1.8%)

2001: 5.85% (posted rate minus 1%)

1991: 9.19% (posted rate minus 0.65%)

1981: 17.54% (posted rate minus 0.25%)

*Thank you to Debra Conner, Housing Information Analyst, CMHC, for supplying the posted rate raw data.

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