Tag Archive: mortgage rate outlook


A Slightly More Hawkish Bank of Canada Keeps Rates on Hold

In Brief Today’s Announcement:No change to rates Overnight rate:0.25% Prime Rate:2.45% (also no change; seePrime Rate) Market Rate Forecast:No BoC hikes until late 2022 BoC’s Headline Quote: “The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved. In our projection, this does...

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10-year Fixed Rates Could Rebound Quicker

If you’ve got a hankering for a mortgage with maximum rate assurance, none beats the 10-year fixed. But once Canada rounds the corner on its economic recovery, 10-year rates could climb faster than other mortgage rates. The reason: 10-year terms reflect longer-term economic expectations than 5-year terms, for example. As a result, they often react more to changes in the...

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Variable-rate Mortgages Should Get Cheaper

Variable rates on new mortgages could get a little cheaper this quarter, for one of four reasons, or maybe all four: Bankers’ acceptance (BA) rates — a general proxy for variable-rate funding costs — are at an all-time low. That’s boosted the spread between prime rate and BAs to almost a 12-year high. Think of that spread as a rough...

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Wednesday’s Historic Events Nudge Rates Higher

The Mortgage Report: Jan. 6, 2021 U.S. 5-year yields leaped to a 7-week high on Wednesday as Democrats took control of all three houses of government, thanks to their historic win in Georgia. Canada’s 5-year yield rose in sympathy by a less notable 2 bps, but economists nonetheless expect more of an incline in rates this year. The reason: Democrats...

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New Year, New Optimism, New Rate Risk

The Mortgage Report: Jan. 4, 2021 2020 was a year that took pleasure in humiliating forecasters. From the remarkable bounce in housing, to the resilience of mortgage volumes, to the devastation in big-city rental markets, to the homeowner exodus from urban cores to the lows of contract mortgage rates, to the persistence of high qualifying rates — 2020 made the...

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Today’s BoC Rate Meeting a Non-factor

Quick Rundown Today’s Announcement:No change to rates Overnight rate:0.25% Prime Rate:2.45% (also no change; seePrime Rate) Market Rate Forecast:No BoC hikes until at least 2023 BoC’s Headline Quote: “The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved.” BoC on the Economy:...

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Spend Until We Bend

—The Mortgage Report: Nov. 30— Trudeau’s government said Monday that it plans to lift Canada’s debt ceiling by up to 57% as it embarks on record spending and deficits in the name of pandemic relief. Canada’s historic deficit just keeps on climbing. It’s now estimated at $381.6 billion for the current fiscal year, up from $343.2 billion this summer and...

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You Can Still Count on Rock-Bottom Rates, Says BoC

—The Mortgage Report: Nov. 27— If you’re out there mortgage shopping, BoC chief Tiff Macklem had a message for you Thursday: “We want to be very clear, Canadians can be confident that borrowing costs are going to remain very low for a long time.” It’s a mantra he’s repeated for months. Among the reasons: “…The economy still has more than...

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More Zigs & Zags to Come

—The Mortgage Report: Weekend Edition— Canada’s rate outlook got a boost this week from two influential developments: Promising vaccine news (20 potential vaccines are in late-stage trials, including Pfizer’s drug that’s reportedly over 90% effective), and The widespread acceptance of Joe Biden’s presidential victory. This much-needed dose of good news led investors to sell government bonds, which is typical when...

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Rate Risk Just Went Up

Bond yields shot up like a cannonball after news broke this morning of Pfizer’s positive vaccine trials. Canada’s 5-year swap rate, one of the best leading indicators of fixed mortgage rates, sailed to a 5-month high. Now, everyone’s trying to figure out how long it’ll take before this translates into above-target inflation, which would be the Bank of Canada’s trigger...

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