VANCOUVER -- Now may be a good time to refinance your home or apply for a new mortgage. Mortgage rates are approaching all-time lows. It took a while but lenders are adjusting to the new normal during the pandemic.

“They dropped, they went up and now they are trending down again,” said James Laird, co-founder of RateHub.ca.

In March, we all watched as the Bank of Canada dropped the key lending rate three times to help boost the economy, yet variable mortgage rates, which are tied to the key rate, didn’t follow.

The average yield on the Bank of Canada started falling too. Fixed mortgage rates are tied to the bond market, and yet again, they didn’t fall. In fact, mortgage rates started to rise.

Money was drying up and lenders were bracing for widespread unemployment, building in extra profit in case of massive defaults on loans.

“But as they’re getting a little more comfortable with the situation that we're in and as they start to see the economy start to reopen, we are seeing fixed rates fall as well,” Laird said.

RateHub tracks mortgage rates from dozens of lenders and currently HSBC is offering the lowest rate on a five-year fixed mortgage at 1.99 per cent. It’s also offering the lowest rate on a five-year variable mortgage at 1.85 per cent.

The current rates are just fractions of a point off the historic lows set during the oil crash in 2016. According to another mortgage tracking website, RateSpy, the all-time record low for a non-tease five-year fixed rate was 1.91 per cent in November of 2016.

“We’re seeing strong rates from big banks, from small banks, credit unions and trust companies so there’s a lot of really good options out there,” Laird said..

Money might be cheap now, but for many people the uncertainty of the economy may put the brakes on buying a new home or even re-financing until things return to normal.

Canada’s major banks have already set aside about $11 billion for anticipated loan defaults. Although their profits were still up in the last quarter ending April 30, there is still a long way to go before the full financial impact of the pandemic is known.