We have been treated to historically low fixed mortgage rates for a while now and it is easy to forget that they can reverse to higher at any point in time. The run up can be fast also.
On Friday the 5 year government yield increased by 12 basis points, the biggest one-day increase in almost a year. When that sort of thing happens when we are at near lows after a long downtrend and a period of sideways trading, it often marks a noteworthy change in market sentiment.
Those waiting for lower rates may be taking a bit of risk. So if you need a 5 year fixed rate, it’s as good a time as any to take the “gift” lenders are giving. This is not to say that rates won’t go lower. Global and domestic risks could continue to keep bond yields depressed, but we have to pay attention to that recent increase.
But don’t be afraid that applying now will make you miss the boat on a better deal. When it comes to rates it’s almost impossible to pick the bottom.
Here is a chart to help put it all into perspective.