Snapshot of Interest Rates Through the Ages

You probably keep hearing the term “low interest rate environment” everywhere from the news to blogs to online articles but what does it really mean?

For instance, you heard that your best friend got a 5 Year Fixed for 1.59% back in January but now the bank is telling you that 5 Year Fixed rates are over 2%, and it’s got you thinking, “have I missed out?”

Perspective is key and as they say, hindsight is 20/20.  It’s easy to see what the “right choice” was once all the dust settles, but that’s not how decision-making works.  We do the best with the information we have at the time we have it, and trust that we make a choice that aligns with what we need.

To shed some light on the current rate environment I’ve included a chart below of prime and sample/average fixed rates going back the last 20 years.  Disclaimer here – there are often multiple increases or decreases to prime in a given year and I haven’t included every single one, and for the fixed rates these are based on average discounted rates which can fluctuate significantly between different lenders and at different times of year.  The figures below aren’t meant to be gospel, but rather a visual illustration of what things generally looked like over a period of time.

For reference, as of the date of this post bank prime rate is sitting at 2.45% and 5 Year Fixed rates are in the neighbourhood of 2.04-2.44%.

Bank Prime Rates

10-Mar-20 3.45% 

31-Jan-19 3.95% 

31-Jul-18 3.70% 

12-Sep-17 3.20% 

2015-2017 2.70% 

27-Jan-15 2.85% 

2010- 2015 3.00% 

09-Sep-10 3.00% 

21-Jan-09 3.00% 

23-Jan-08 5.75% 

11-Jul-07 6.25% 

26-Apr-06 5.75% 

07-Dec-05 5.00% 

21-Jan-04 4.24% 

16-Apr-03 5.00% 

17-Jul-02 4.50% 

01-Jan-01 7.25%

Sample 5 Year Fixed Rates

2020 2.79% 

2019 3.19% 

2018 3.64% 

2017 3.49% 

2016 3.14% 

2015 3.14% 

2014 2.89% 

2013 3.14% 

2012 3.20% 

2011 3.50% 

2010 3.85% 

2009 5.05% 

2008 6.41% 

2007 6.36% 

2006 5.98% 

2005 5.48% 

2004 5.80% 

2003 6.04% 

2002 6.70% 

2001 7.18%

I won’t exhaust you with a lengthier list but going back even further you had bank prime rates in 1999 as high as 7.50% and as high as 9.75% in 1995.

As for fixed rates, if you want to view some ‘yikes-inspiring’ rates from pre-2001 click on the link below:

Mortgage Architects - Historical Mortgage Rates

There is no moral to this story, other than to say that there are a number of factors that influence rates (economic cycles, government policy, housing market conditions, the bond market, inflation, heck – even global-wide pandemics) so lamenting about what’s been or what could be is hardly productive.  As long you’ve explored competitive options and the mortgage payment meets your needs, then I say rates-schmates.

That said, a quick glance at the list above and there’s no denying that we’re still in a pretty darn competitive period for all things rate-related, and so it never hurts to strike while the iron is hot if the timing makes sense for you.

Questions?  Let’s talk.