As rates come down, five-year fixed mortgages vie for the crown

financialpost.com:

A slew of fixed-rate mortgages got cheaper this week, including the uninsured four-year fixed and the insured one-, three-, and four-year fixed. And it looks like 2024’s term of choice — the three-year fixed — is slowly ceding its crown.

“I think we’re starting to see more of a shift to five-year terms now that rates are coming down,” Justin Herlick, chief executive and co-founder of Pine Mortgage, said. “As soon as you see a “three” in front of it, a lot of people will go back to the five-year,” he predicts. That’s the term most Canadians have historically preferred.

For commitment-phobes needing default insurance, Marathon Mortgage now offers a 4.19 per cent six-month fixed that you can renew into an adjustable rate. Its primary benefit is not the rate savings, however, it’s that it helps borrowers get approved with more flexibility. Its 4.19 per cent contract rate comes with just about the lowest mortgage “stress test” rate in Canada, 6.19 per cent. That means borrowers can qualify for the same-sized mortgage with slightly less income.

Note: True North Mortgage has a 3.49 per cent version of this six-month product, but its renewal rate “may carry an added premium,” the company says. Both offers come with a one per cent fee if you don’t renew after six months.

Looking forward to next week: Wednesday should be a consequential day in Mortgage Land. Markets are gearing up for the Bank of Canada’s third interest rate cut in just over three months. Forward rate data from CanDeal DNA peg that prospect at virtually a 100 per cent probability. So, to all you floating-rate borrowers out there, celebrate this long weekend with some savings.

The rates displayed below are updated by the end of each day and are sourced from the