In the last week the big banks have increased their 5 year fixed mortgage rates by 30 basis points. The bond rates have increased by only 10 basis points.
It looks like the banks are trying to increase their earnings by charging their clients more when it doesn’t look like they need to. How much more do they need to make?
The credit unions have reduced their rates.
Now there is a 74 basis point difference in the 5 year fixed rate between the big banks and our credit unions.
For a $300,000 mortgage amortized over 30 years, there is a $11,452 difference in interest over 5 years. That is a large amount to be losing out on by using a bank.
This is creating a very good opportunity for those high interest mortgage holders right now.
The penalties for refinancing into a lower rate mortgage will be calculated on the increased rates, reducing them ,but your new rate will be much lower increasing the potential savings.
If the penalties were scaring you off before, this is a good time to take another look.
Please contact me if you have any questions or comments.