Interest Rates

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.

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Mortgage rate forecast (March 2015)

Since the Bank surprised markets in January, expectations for future rate decisions have fluctuated wildly, whipsawing longer-term interest rates. The five-year bond yield has recently rebounded after breaching the 1 per cent mark on its way to a record low of 0.59 per cent. Meanwhile, the five-year fixed mortgage rate, the qualifying rate for all insured mortgages, currently sits at 4.74 per cent. That may be the absolute floor on the posted five-year fixed given that a 75 basis point decline in the five-year bond yield translated to only a 4 basis point reduction in the qualifying rate.

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