Interest Rate Outlook in December

Hello again, suns shining here in Victoria although a touch cold at 3 degrees celcius...good excuse to pick up a fedora and scarff...

Notable interest rate action the past few weeks. The 5yr and 10yr bond yeilds have been falling since hitting recent highs October 15th of 2.88% and 3.55% respectively. Yesterdays close for the 5yr was 2.39% and 3.55% for the 10yr, both rates are falling again today.

This drop is showing up in mortgage rates, the best 5yr fixed is creaping below 4.00%and the best 10yr fixed is back around 5.35%. The variable rate has broken the Prime (2.25%) level and we're now seeing Prime -.10%.

Commercial rates are moving down as well, best 5yr fixed I've seen is around 5.10% and the best 5yr variable around Prime + 1.00%. Of course every commercial deal is different with several factors influencing the final interest rate but I think it's clear rates have dropped...

My feeling is rates will likely remain down longer than anticipated and a variable rate mortgage with a Lender possessing a competitive 5yr fixed rate is the way to go...

Hope you all enjoy the Season...



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