Mortgage rates hit new low with Investors’ Group 1.99% variable rate

Just when you thought mortgage rates couldn’t get any lower, they have.

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TORONTO – Just when you thought mortgage rates couldn’t get any lower, they have.

Investors’ Group is offering a 36-month closed, variable-rate mortgage at 1.99 per cent, well below the current standard of around three per cent.

The mortgage is also well below the 2.99 per cent level that drew sharp criticism from former finance minister Jim Flaherty when BMO first tried it, because he was worried it would trigger a damaging housing bubble.

Joe Oliver, who took over from Flaherty, has said he has no plans to intervene in the setting of mortgage rates, calling it a “private” decision by lenders.

Royal Bank made waves in January when it lowered its rates on several fixed-rate mortgages by 10 basis points, bringing its five-year closed rate to 3.69 per cent. It now sits at 4.94 per cent, while the variable five-year rate is at three per cent.

RBC said at the time the rates were lowered to match competitor pricing, and several other big banks followed suit.

4 comments on “Mortgage rates hit new low with Investors’ Group 1.99% variable rate

  1. Real estate investors, buyers, agents, brokers and anyone that makes money from real estate, be careful what you wish for.

    A 60% to 70% deep drop in prices like what happened in Japan when all interest rates including mortgage rates fell to new historical lows.

    Real estate and stock market, equities speculation, followed by deflation, higher debt levels, a stagnant and depressing economy, higher unemployment and a deep economic malaise is what did them in

    Interest rates are low for a reason and it is not for people to make a lot of money from selling homes, condos etc.

    Reply

  2. So what is going to happen is that people who cannot really afford a house will now be able to buy one and then lose it when the rate doubles at renewal time.

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  3. If they lose their job or get a pay cut by the time it is renewal mortgage time, higher mortgage rates will be a secondary problem because they would not be able to keep the house paying 30% higher electricity prices, 30% higher water rates, 15% higher property taxes, 15% higher cable, telephone internet etc. bills, 20% higher natural gas heating costs, 20% higher gasoline prices, 20% higher auto, home insurance costs, 10% to 15% higher food prices and on and on and on.

    People think too short term or do not think at all. A 1.99% 3 year variable mortgage is a gimmick plain and simple to catch those that do not care or know better.

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  4. I know it’s probably a dumb question, but can someone explain to me why low mortgage rates supposedly lead to a housing bubble? Does it lead to the forming if the bubble or the burst?

    Reply

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