Skip to content

TagMortgage Rates

Posted Mortgage News

Record low Bond yields means even lower fixed mortgage rates

graph trend downFixed 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 1 Comment on Interest rate surprise? Not to our readers! : Bank of Canada drops key lending rate to 0.75% Bank News

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

big newsLast 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 Interest rates

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

Variable rate mortgage 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?”

Posted Debt

Looking ahead to 2015 rates and trends

happyholidays (1) Seasons Greetings!  Happy New Year!   Quick thank you for making 2014 a great year!  Hope yours was just as special.  And I’m wishing you much success and happiness in 2015.

I’ll make this quick as I’m sure you have some New Year’s Eve celebrations to attend to.

QUICK YEAR IN REVIEW.

  • Interest rates haven’t really changed this year.
  • 5 yr fixed rates are under 3.00%.
  • Variable rate pricing improved to around Prime less 0.60% (less in some cases and dropping).
  •   In fact, looking at the big picture, interest rates haven’t really changed much in the last 4 yrs.   Yet, you wouldn’t know it by reading the newspaper headlines….(sorry to my media friends…)

Let’s get to it.  MY THOUGHTS ON 2015. Continue reading “Looking ahead to 2015 rates and trends”

Posted 2 Comments on Bank of Canada says no rate hikes, but possible rate drops!! Mortgage News

Bank of Canada says no rate hikes, but possible rate drops!!

stephen poloz  Last week, the Bank of Canada governor, Stephen Poloz, held the first of 8 scheduled meetings to set the Target Rate.    This is the rate used to set the Bank Prime rate which currently sits at 3.00%.   No surprise, no change in the rate.  It has been the same since Sept 2010.

From 2011 to 2013, the previous Bank of Canada governor, Mark Carney, continually announced of a pending rate increase.   But late last year, Poloz changed the tide when he announced it could be a few years before rates go up.   One of the key drivers for rate hikes is inflation.  The BoC target for inflation is between 1% and 3%.  If inflation goes above 3%, we can expect rate hikes.

Inflation is not a concern.  In fact, there are concerns about deflation as the current inflation rate sit at 1.2%.  Some experts believe we could see the BoC rate drop.  Great news for anyone in a Variable rate.   We are also seeing the govt of Cda bond yields drop.   Friday’s close was down to 1.59% for 5 yr bonds.  Haven’t seen that level since June 2013.   This means Fixed mortgage rates will probably go down further. Continue reading “Bank of Canada says no rate hikes, but possible rate drops!!”