Fixed term mortgage rates have increased by one of the largest one day increases in recent memory. The posted 5 yr rate has risen by 6 tenths of a percent, to just under 6%. Discounted rates are still around 4% for a 5 year term.

Variable mortgage rates, which are directly related to the Bank of Canada Prime Rate, are not rising at this time. Indicators suggest that the prime lending rate will increase in the review on June 1 2010. Fixed term rates are going up now in reaction to bond markets which are seeing increases in interest rates in anticipation of the Bank of Canada raising prime rates come summer.

The discounted 5 year rate is still around 4%, but rate increases of this magnitude indicates we have experienced the bottom in regards to fixed term rates. In other words, for those of you who are adverse to risk, now is most likely the time to lock in your mortgage.

There are many options to look at when you lock in. Many clients are locking in at the discounted broker rate yet setting their payments at the posted 5 year rate. This effectively knocks years off and saves tens of thousands of dollars on the average mortgage. Other clients are staying with a variable rate, yet using this rate increase to rethink the repayment of their mortgage and increasing their mortgage payments to take full advantage of their low interest rate while they still can.

To sum it all up, now is the time to consider refinancing to incorporate other debt into your mortgage, access equity to renovate, move up to a better home, or buy your first home. Low interest rates, low vacancy rates and one of the strongest economies in Canada all point towards higher residential house prices going forward over the next year or so. If you act now we can still get you pre-approved at today's rates!