News & Resources

5 Year Fixed Hits Another Record Low At 2.88 Per Cent

July 30, 2012
2 mins
A woman talks with a young couple about their options

I know I’m starting to sound like a broken record here – 5 year fixed mortgage rates have dropped to a record low AGAIN to 2.88% – that’s the third time in as many weeks! Offered through Advent Mortgage Services, this most recent record-breaker is available in Ontario, Yukon and Northwest Territories – but who knows for how long!

Welcome To The Drop Zone

Last week the 5 year fixed gave us vertigo with all of its drops and rebounds. Kicking off with the rock bottom (or so we thought) 2.94% in Ontario, we were in for another nosedive on Thursday, as 2.89% emerged as the new low  - and this time it was very nearly nationwide, with almost every province seeing a drop. Looks like Ontario is leading the pack again this week, sporting a new low of 2.88%. And yes, these are full-service mortgages, giving you the option to increase your regular payment amount by 20% and apply lump sum payments up to 20% annually.

What’s The Month-To-Month?

As we’ve done with the prior rate drops, let’s take a look at what your mortgage payments would look like at this new low. Firing up a handy Mortgage Calculator, let’s assume the following: Right off the top, you’ll be looking at a mortgage payment of $1809 a month.

  • You’re purchasing a home in Ontario at $387,200 (forecasted average MLS resale price for Ontario, CMHC)
  • A 5 year fixed rate of 2.88%
  • An amortization of 25 years
  • Monthly payments

Let’s Mix It Up

For those looking to speed things along, let’s factor in a bi-weekly rapid payment schedule with each payment at $904. Right off the bat, you’re looking at interest savings of $18,769 over the course of your mortgage. Impressive – and you’ll have shaved 3 years off your amortization! Because this is also a full-service mortgage (gotta love those frills), you’ll also have lump sum options to take advantage of. So, should you find an extra $1000 to put toward your mortgage yearly (assuming monthly payments), and the interest saved will be $11,133 and you’ll be mortgage-free 2 years sooner. Now let’s say you can swing both bi-weekly rapid and lump sums payments. You’ll save yourself a whopping $27,504 in interest over the course of your mortgage and you’ll have paid off that mortgage a full 4 years early.

Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

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