Rates on a standard five-year fixed mortgage have fallen to their lowest level in two years, according to Ratehub.ca.

Borrowers almost everywhere across the country can take their pick of offerings well below 3% at the moment, said James Laird, the site’s co-founder. That’s partly for seasonal reasons; the spring months are typically the best ones for home buying, as families try to move and settle before summer vacations and then the new school year sets in.

"Promotions are April, May and June … when all mortgage companies try to make sure they are on track to hit their annual targets," Laird said. "Anyone who's behind at this point would be aggressive with the margins they're willing to fund mortgages at right now."

Laird said that he sees five-year fixed rates as low as 2.64% for certain buyers, and even high-risk borrowers can easily find a loan for 2.89%. It’s the lowest range since the summer of 2017, he said, and a big reason is the bond market.

Current rock-bottom interest rates on fixed loans are no coincidence, considering that the yield on a five-year federal government bond dropped below 1.3% this month. If lenders can borrow funds from the bond market for as low as 1.3% and loan it out for twice that rate, they have every incentive to keep offering these deals, according to a CBC report.

"The hard cost of funding these loans is going down," Laird said. "And at the same time, we are at the tail end of the most competitive market, when lenders fight for [business], so that's when they are willing to thin out their margins a bit to attract volume."

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