Tag Archive: bond yields


Record-Low Fixed Rates May Depend on the BoC

—The Mortgage Report: Oct. 21— Canada’s budget deficit will end 2020 “near 20% of GDP,” according to the IMF. “That represents the fourth-highest projected deficit in the world, after Libya, Aruba and the Maldives,” says Bloomberg News. With that degree of fiscal hemorrhaging in Ottawa, bond yields (and hence fixed mortgage rates) would jump sooner were it not for Bank...

“This Time is for Real,” Says BofA

—The Mortgage Report: Oct. 13— If you like definitive-sounding rate calls, here’s one: “The 2020 recession AND the 40-year bond rally are over,” declares Bank of America. Positive economic data surprises, declining uncertainty post-U.S. election and “massive monetary and fiscal policy support” will “set the stage” for higher bond yields, the bank stated in a report on Tuesday. If true,...

Refi Ahead of Condo Trouble?

—The Mortgage Report: Oct. 7— Toronto condo listings have exploded 215% to a record high, reports Bloomberg. And they’re projected to be even higher in October, according to HouseSigma. Driving that surprising number: skittish investors (many with negative cash flow given surging rental listings and a 14% y/y drop in rents) “elevator phobia” people coming off mortgage deferrals relatively higher...

The Bank of Canada Controls Your Mortgage Rate

Bond yields heavily influence what people pay for a mortgage. In general, the more government bond-buying there is, the lower fixed mortgage rates go. Explainer: Bond prices and bond rates (yields) always move inversely. Fixed mortgage rates are benchmarked against bond yields. Governments around the world are manipulating mortgage rates by buying their nations’ own debt. Take the U.S. Federal...

The Striking Rate/Stock Divergence Continues

—The Mortgage Report: Sept. 2— Here’s something that baffles even experienced financial professionals. The U.S. stock market is exploding to all-time highs while bond yields trudge near record lows. It’s a question investors are asking all the time: are stocks signalling a growth recovery that will lift yields higher? The mortgage relevance is clear: if U.S. yields pop, so do...

Yields Wake Up

A Two-Month High for the 5-year Yield Canada’s #1 fixed mortgage rate indicator, the 5-year bond yield, has stubbornly refused to challenge its March record low. And now it has turned upwards, closing Thursday at the highest level in two months: 0.44%. Concerns over inflation and massive government debt issuance are two key reasons. A close above 0.55% could indicate...

Rates Get Closer to Zero

—The Mortgage Report: Aug. 4— Historic 5-year Yield: On Tuesday the U.S. 5-year Treasury traded just 19 basis points above zero—where it’s never been before. If it drops a smidgen lower, that could be enough to drag Canada’s 5-year yield (and hence, 5-year fixed mortgage rates) to record lows as well. Stay tuned. Setting the Pace: Tangerine now has the...

Looking for Better 5-year Fixed Rates? The BoC’s Got You Covered

—The Mortgage Report: July 31— Snapping Up Bonds: Fixed-rate mortgage shoppers dreaming of lower rates better hope for lots of bond buying in the months to come. And that’s what we’re getting from the Bank of Canada. The BoC is buying a lot of 5-year bonds, which heavily influence 5-year fixed mortgage pricing. Under the Government of Canada Bond Purchase Program...

People Are Locking in Till 2030 at Record Low Rates

—The Mortgage Report: July 29— Decade Rates at All-time Lows: In Ontario, folks can now enjoy borrowing cost certainty for a tenth of a century, at effective rates as low as 2.59% through brokers. 10-year fixed rates have literally never been lower. Most borrowers wouldn’t think of paying 50+ basis points more (on top of a 5-year fixed) to get...

No Price Crash. Quite the Opposite in Some Cities.

—The Mortgage Report: July 7— Price Expectations vs. Reality: “…Consumer expectations for house price growth in Canada dropped to zero,” according to a BoC survey released yesterday. But the data is about a month and a half old. Since then, home prices in the Greater Toronto Area have broken their 2017 record high. Imagine where prices would be if employment...