TagMortgage Rates

Posted August 31, 2015 Interest rates

Rates usually drop leading up to a Federal election!

History tells us that mortgage rates usually drop leading up to an election. And 2015 has followed that trend. It started in January of this year, when the Bank of Canada (BOC) Governor, Stephen Poloz, shocked Economists with his surprise 0.25% Bank Rate cut.

(CanadaMortgageNews.ca readers will remember, not all were shocked, as I had predicted a rate drop just days earlier).

Then in July, the BOC Govr did it again.. this time, it wasn’t as much a shock. The Bank Prime was cut by another 0.25% after months of negative Economist data showed the Canadian economy was slowing. Continue reading “Rates usually drop leading up to a Federal election!”

Posted May 14, 20151 Comment Interest rates

Bond Yields are up… will Fixed Mortgage rates follow?

Fixed mortgage rates are tied closely to the Govt of Cda bond yields. And bond yields are up… Since mid April, the 5 yr Gov of Cda bond yield has gone from 0.75% to 1.07%. That’s a 0.32% jump. Normally, we would see fixed mortgage rates go up.

So far, no increase. But that’s probably more to do with a competitive Spring housing market. This is when most house sales and mortgage transactions take place. The Banks need to maintain certain market share levels in order to keep shareholders happy. They are willing to sacrifice a little profit margin (and I do mean little… they seem to make up for this with higher service fees as was recently reported, but let’s not get into that now…).

If the bond yields continue to increase, we will see fixed mortgage rates rise. That’s an automatic. The real question is how long will the bond yields continue their climb? It will be interesting to watch the next few months. We can expect to see some rate increases as the Spring market ends and Banks look to increase their profit…. A pattern that repeats itself year after year.. but here’s what you can do to protect yourself… Continue reading “Bond Yields are up… will Fixed Mortgage rates follow?”

Posted February 3, 2015 Mortgage News

Record low Bond yields means even lower fixed mortgage rates

Fixed mortgage rates are tied into Govt of Cda bond yields. As the yields go done, so does the fixed mortgage rates.. well, usually.. more on that later..These bond yields have hit all-time lows in the past week… Yesterday, they were as low as 0.55%... To put that into perspective, the 5 yr bond yield is lower than the Bank or Canada overnight rate, which now stands at 0.75%. Another historical event. That almost never happens.

Check out these 2 historical charts to compare the Bank of Canada rate from 1935 to Dec 2014 and 5 year Govt of Cda bond yield from 1980 to Dec 2014….

If you’re wondering what this means for you, a Canadian consumer, it means mortgage rates should go even lower. Institutional investors are pricing in a further Bank of Canada rate cut at their next schedule meeting on March 4th, 2015. Continue reading “Record low Bond yields means even lower fixed mortgage rates”

Posted January 21, 20151 Comment Bank News

Interest rate surprise? Not to our readers! : Bank of Canada drops key lending rate to 0.75%

Last week, I made a bold statement about interest rates. I said rates will remain low for some time. And they could even decline.

That forecast was met with a certain degree of criticism. Well, no surprise for CanadaMortgageNews.ca followers, the Bank of Canada cut the rate by 0.25% to 0.75%.

This means Variable Mortgage rates will fall by 0.25%. It also means we’ll probably see fixed rate mortgages also fall….. As I predicted.

Stay tuned for more details on this…

http://www.ctvnews.ca/mobile/business/key-interest-rate-unexpectedly-lowered-1.2198493

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted January 16, 2015 Interest rates

So, you think rates are gonna spike up this year? Who says?

Here we go again… The beginning of a new year, and the same annual forecasts for interest rates to go up! Before I share my thoughts.. Here’s some of the recent headlines that I’ve seen….

a report by CBC News sharing 4 ways to prepare.. including selling your home, waiting to buy and locking into a Fixed rate mortgage! (Can you say panic?)
Here’s another from The Globe and Mail telling us it’s “Bad News for Borrowers: The economy could improve this year”. Really? Tell that to the people in Alberta, Newfoundland and Saskatchewan.
And this one from last week says Get ready for Interest Rate Shock in 2015.

Wow, reading this means rates are certain to up this year…right? So let’s see.. we should sell our home, put off buying (yet again) and lock in our Variable rates into Fixed rate mortgages..

Now let’s look at the most recent headlines.. Continue reading “So, you think rates are gonna spike up this year? Who says?”