Springtime is a seasons of new beginnings. Many Albertans take the time to revel in the warmth, tackle their spring cleaning, or do a little shopping. According to new data from ratehub.ca this season may be the best one in which to take on a mortgage.
Ratehub put together information from 2016 to 2018 and discovered that there was a consistent drop in mortgage rates between the months of April and July, no matter how much rates fluctuated the rest of the months of the year.
Spring sales are often seen by many other retailers such as clothing and shoes vendors, but are also used more and more by other retailers such as car dealerships and mortgage lenders.
James Laird, president of CanWise Financial, said, “Lenders and mortgage providers come out with their strongest promotions during the busy spring and summer home-buying season. Regardless of the interest rate environment, springtime is when lenders are willing to make the smallest margins in order to win business.”
Laird went on to say, “Lenders also come out with special promotion offers to incentivize borrowers to lock in a rate. Consumers can expect to see cash-back deals to help with closing costs and refinance fees.” If you’re an existing mortgage owner this incentive may be just what you need in order to refinance.
In 2016, according to the data compiled by ratehub, the best five year variable rate average was 2.37% between the months of January and March. This rate dropped to 2.33% between April and July. The best five year variable rate average in the first quarter of the year was 2.96% and dropped to 1.97% between April and July.
In 2017 the best five year fixed rate average in the first quarter was 2.3% and dropped to 2.25%. That year the best five year variable rate average dropped from 1.8% to 1.69%.
Then in 2018 we saw a rising rate environment, but yet again the best average rates dropped between April and July. The fixed rate dropped from 2.3% to 3.04% and the variable rate dropped from 2.2% to 1.86%.
According to Laird mortgage lenders have a big incentive to get involved with competitive spring pricing.
“[Lenders] do so in order to hit their annual mortgage volume targets… In most cases, lenders will hit their targets during Q2 (April to June) and, as a result, tend to be less competitive with promotions during the latter half of the year.”
If the spring pricing doesn’t work for you chances are you’ll get another opportunity for a rate drop during the month of October. “All of Canada’s major domestic private banks end their fiscal year on October 31,” Laird said. “Lenders who want to get an early start on their targets for the next year will come out with their promotions during this time period.”
Whenever you choose to go shopping for a mortgage, be the best shopper you can be by contacting Your Trusted Mortgage Broker to find out what all the best deals are and where to find them. To get started today give us a call!