Most Government of Canada (GoC) bond yields took a small dip by the end of last week, including the 5-year GoC benchmark bond yields which fell seven basis points (bps). The opposite occurred with 5-year fixed mortgage rates as the lowest rate found on Ratehub.ca rose five bps. The lowest 5-year variable rate continues to hover between 2.75% and 2.85% in 2012.
Tomorrow the Bank of Canada will make its third interest rate announcement of 2012 and it is widely expected that they won’t hike interest rates. What many industry experts are expecting is the BoC to change their tone amid a relatively brighter economic outlook. According to Avery Shenfeld, the chief economist for CIBC World Markets, “The Bank of Canada will sound slightly more hawkish in projecting a narrower output gap with an earlier date to close it, and a bit less fear of a financial panic originating in Europe.” Mr. Shenfeld then goes on to say, “It’s too early to either hike rates or sound a clear warning of an upcoming move…nonetheless, this will likely facilitate upside pressure for rates.”
Where are Canada Mortgage Rates this week?
A 5-year history of weekly 5-year fixed mortgage rates and 5-year variable mortgage rates
Canadian Mortgage Rates 2012
The current spread between the best discounted 5-year fixed rate and the best discounted 5-year variable rate is 44 basis points and represents the biggest spread between the two rates thus far in 2012.
Note: This is simply a small sample size and does not represent the entire market. It does, however, offer some useful insight.
_________________________________________________________________________ The Globe and Mail