New Bank of Canada Data
New data from the Bank of Canada reveals that the average Canadian with an outstanding 5-yr, or longer, mortgage term is not even paying 3% interest — despite market rates being 5.5%.
As a group, they have an average interest rate of 2.95%
In fact, they are still paying less than they were pre-pandemic.
Basic math dictates that their good luck is about to run out, though — this chart is likely to spike up to market rate of 5%+ as their terms come to an end in 2025 and 2026.
In other words, this graph is anticipated to shoot up 200% in under 2 years.
How is this possible?
Its due to a glut of buyers having locked in for 5 years at ultra low interest rates in 2020 and 2021 and because buyers have been shunning 5-yr mortgages for lower duration terms over the last couple of years.
So, as they saying goes “the party has even started yet!” There’s still lots of cheap money out there bracing for interest rate shocks to come.
How are 5-yr fixed holders faring vs. everyone else?
Well, much better.
Ill let this chart tell that story:
