Interest rates to remain in holding pattern; mortgage rate forecast (June 2015)

Canadian mortgage rates have, more or less, held steady in the second quarter after trending surprisingly downward to start the year. The 5-year fixed rate, the qualifying rate for all insured mortgages, remains at 4.64 per cent, the lowest level on record. Key bond yields, from which mortgage rates are priced, have risen from their own record-low levels; however, those increases have yet to nudge mortgage rates higher and are unlikely to do so during the important spring/
summer home-buying season.

With the Canadian economy unexpectedly contracting in the first quarter, due to last year’s dramatic decline in oil prices and the associated downtrend in CPI inflation, there is very little upward pressure on borrowing rates.

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