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Unexpected job loss report and effect on mortgage rates.

unemployment Last week’s Employment Stats shocked everyone when we didn’t see the expected 14,000 new jobs created as Economists were expecting.  Instead, we got hit with a reported 46,000 jobs lost in December.    Economists aren’t always accurate with their forecasts (news flash) but they usually aren’t this far off either. We won’t look at why they miscalculated here, but I do want to look at the effects of this bad news on your mortgage.

EFFECT ON FIXED MORTGAGE RATES

Higher unemployment and job loss is never a good thing.  We’re not celebrating here.   But we need to understand how it affects our mortgage rates.     When it comes to rates, bad economic news is good news.    And we saw the effects almost immediately.  Bond yields dropped by around 0.15% to 1.73%, taking the pressure off Lenders to raise rates (fixed mortgage rates are priced closely to Govt of Cda bond yields).   This means fixed mortgages won’t go up anytime soon and could even fall should the bond yields remain at this level. Continue reading “Unexpected job loss report and effect on mortgage rates.”

Historical Rates updated…Canada reports job losses.. Fixed rates drop

Historical Rates

Here’s an updated chart that shows Fixed and Variable mortgage rates over the past 25 years…. click here.

Fixed rates drop again

Seems like it was just yesterday when we heard reports of mortgage rates going way up….  Posted Fixed rates fell again with RBC dropping their 5 year fixed rate to 5.59%.   Discounted 5 year fixed rates are now available at 3.89%…and Variable rates are hovering at around 2.10%.

Canada loses 139,000 jobs in July

Quoting a report from CBC.ca, Statistics Canada shows some cities improved their unemployment figures…but overall, we have few full-time jobs and more part-time jobs…  The recovery from the recession still seems to be headed in the right direction but this is definitely a speed bump that will slow us down..

The good news is for borrowers of money… interest rates shouldn’t go up in any hurry… in fact, we have seen fixed rates drop over the past 40 days…. watch for flat or modest rate movement over the next several months.

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