"This is the bottom" for fixed and variable mortgage rates: industry panel

RateSupermarket.ca announced the formation of its monthly mortgage rate outlook panel, which gathered industry experts to comment on the short-term mortgage rate outlook for variable and fixed rate mortgages.

"The appetite for fixed rate mortgages is on the increase as borrowers realize that five-year fixed rates around four per cent are a steal when compared to historical levels," said George Hugh, vice-president, treasury, ING Direct. "The downward pressure on rates is being driven by strong lender demand for residential mortgages. Don't expect rates to fall too much below current levels over the next 45 days."

The panel consisted of Hugh, CMP top 50 brokers Jim Tourloukis, president, Verico Advent Mortgage Services and Dan Eisner, president, Verico True North Mortgage, as well as Gregory Klump, chief economist, Canadian Real Estate Association (CREA), Dr. Ian Lee, director of MBA program, Sprott School of Business, Carleton University and Garth Turner, author and former MP.

"Mortgage rates have fallen in step with the bond yields with some lenders offering five-year fixed mortgages as low as 3.69 per cent," said Tourloukis. "I think this is the bottom."

The general results of the first panel, which looked at the likely outcome of the Dec. 8 Bank of Canada announcement, are as follows:

"80 per cent of panel members agree that fixed mortgage rates will remain unchanged as we move into 2010 ... and 60 per cent of our panel members believe that variable mortgage rates will remain unchanged following the Bank of Canada announcement."