Rising Fixed Mortgage Rates on the Horizon – experts predict as early as next week
Canadian Mortgage Rates: Canadian Bond Yields have surged over 61 basis points (0.61%) in the past two months, with a sharp 17-basis point increase in the last week alone. Experts predict this will lead to higher fixed mortgage rates in the coming weeks. Ron Butler, a mortgage rate expert, notes that rising U.S. Treasury Yields, driven by inflationary pressures from U.S. policies, are influencing Canadian Bond Yields.
Canada’s Inflation Challenge and Its Impact
Canada is grappling with inflation, which rose to 2.0% in October from 1.6% in September. Core inflation measures increased, pushing Bond Yields higher. Adding to this pressure, the Canadian Government’s new spending measures, such as a $250 payout to millions of Canadians and a GST/HST holiday on some goods from December to February, could also add fuel to inflation.
Canadian Mortgage Rates – The Comeback of Variable Mortgage Rates
While fixed mortgage rates are poised to rise, variable rates may become more attractive as the Bank of Canada is expected to continue cutting rates. Analysts like Ben Rabidoux note an uptick in variable-rate mortgages, particularly among risk-tolerant borrowers. Although 3 and 4 year fixed terms remain the most popular, variable rates are regaining favor due to their potential for lower costs in a declining rate environment.
What Should Mortgage Borrowers Do?
Canadian Mortgage Rates expected to rise amid bond yield surge. Borrowers may want to act quickly to secure current fixed rates or consult an experienced mortgage advisor to explore the growing appeal of variable rates. Staying informed and adaptable will be key in navigating these changing market conditions. If you have questions, Client First Mortgage Solutions is here to help you. Contact us today!
Original Article – Steve Huebl – Canadian Mortgage Trends – November 21, 2024
