Rates for the most popular type of mortgage in Canada have sunken to the lowest level in about two years, and they could be heading further south before 2019’s end, suggests RateHub.ca co-founder James Laird.

The lowest five-year fixed-rate available on the rate-comparison site today is 2.64 percent from CanWise Financial, a mortgage brokerage also owned by Ratehub.

Laird had to go back to summer 2017 to find rates that low, and his outlook suggests they aren’t about to increase again any time soon.

“Right now, with all the information available today, it’s the same to lower,” Laird tells Livabl, forecasting where five-year fixed-rates should remain for the rest of the year.

Five-year fixed-rates are now almost at the same level as variable rates, which Laird notes is “very unusual.”

Typically, variable rates are half-a-percent lower, which compensates for the fact that unlike a locked-in fixed rate, they can fluctuate.

“Today, they’re almost the same, which means that for you to take a variable rate, you need to have a very pessimistic outlook on the economy and rates and things like that,” explains Laird.

“To take a variable rate right now, you’re predicting the Bank of Canada is going to drop their key overnight rate — or else there’s no point in taking a variable rate right now,” he adds.

The overnight rate influences the mortgage market, in particular variable rates, which closely follow it.

The Bank of Canada will typically cut rates when the economy needs a boost, as lower rates fuel borrowing and spending activity.

While not many market observers are calling for a cut to the overnight rate this year, the general consensus is the central bank will stand on the sidelines, at least for now.

Late last month at a scheduled announcement, the Bank of Canada maintained the overnight rate at 1.75 percent, and in response, the Conference Board of Canada predicted that’s where it will remain for 2019.

“Even with the Bank noting that the recent slowdown in economic growth appears temporary, as they had expected, we maintain our view that the Bank will remain on hold into next year,” Alicia Macdonald, the board’s principal economist, says in a statement.

Today, Desjardins Senior Economist Benoit P. Durocher, predicted the rate environment will remain consistent for the next several months, although he noted global uncertainties, particularly in terms of trade conflicts, could spark a move from the central bank at some point.

“The status quo on key interest rates will continue for several more months,” he writes in response to new Statistics Canada data showing the national unemployment rate just fell to its lowest reading since 1976.

“However, the monetary authorities cannot ignore the many uncertainties facing the world economy, particularly due to trade tensions,” Durocher says.

RateHub’s Laird observes the closeness in variable and fixed rates has “absolutely” encouraged more consumers to opt for the latter. “Variable is very unpopular right now.”

Canadian Mortgage Ratesare Now at Their Lowest Level Since 2017. Here’s Where They’re Heading Next by Josh Sherman | Livabl