The days of extra-discount variable rate mortgages may soon become a thing of the past.
Although this will not affect you if you already have a variable rate mortgage, it will definitely affect you if you plan on getting one in the near future. The average market rate for variable rate mortgages has been prime minus 0.75% for quite some time. This rate is a historical low, but some lending institutions have already begun reducing their discount to prime minus 0.65% and even prime minus 0.50% in recent weeks. This trend is expected to accelerate rapidly as lenders try to cope with a lack of profitability on this product. Basically, the spreads on variable rate mortgages have become too small for banks and lending institutions to make a decent profit on them.
So if you are planning on securing a variable rate mortgage in the near future, you have been warned to act quickly and to thoroughly shop the market for the best deal out there. Feel free to call or email any time for mortgage or real estate advice, I am more than happy to help!
Your Friend and Real Estate Professional for Life,