Canadian Mortgage Rates Rise

We saw all the banks raise the posted mortgage rates by .20% today. The banks are citing the credit crunch and the potential further loses from US sub prime market as the reason for the increase. If we look at today's bond rate for a 5 year Canadian mortgage the rate is 3.95%. The banks are now charging the consumer 7.54% for a 5 year term. As you can see there is a large gap in the Canadian 5 year mortgage rate. We can currently access a discount of around 1.55% off of that posted rate, which means the banks are still earning a 2.00% spread on the best mortgage rates. Now is a time to be looking at a variable rate mortgage as prime has dropped by.25% and expected to go down again by .25% in the new year.