A look at this week’s available mortgage rates on fixed and variable terms and HELOCs.Charles Krupa/The Associated Press
Fixed mortgage rates dip big
It’s been raining rate cuts this week. The nation’s leading fixed rates are down anywhere from five to 25 basis points, depending on the term. (One basis point is one one-hundredth of a percentage point.)
Driving these cuts are bond yields, which are sinking courtesy of mini-banking panics south of the border and abroad.
The world’s most powerful central banker, U.S. Fed Chair Jerome Powell, said yesterday that lenders may tighten up lending as a result. That could slow the economy and inflation quicker than expected.
If he’s right, and barring further inflation catalysts, yields could keep falling, taking fixed mortgage rates with them. We’re on the cusp of a seven-month low in fixed rates already.
In the meantime, the lowest stress test rates have fallen 35 basis points this week. Stress test rates are the rates lenders make you prove you can afford. They’re at least 200 basis points higher than the actual rate you pay.
This easing mortgage qualifying gives borrowers about 3 per cent more buying power. Given that most buyers purchase as much home as they can afford, this should put a little spring in the spring housing market’s step.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.