Banks raise ‘special discounted’ fixed mortgage rates – Toronto Star
Over the last week, several major Canadian banks have raised their fixed mortgage rates. Rate increases have actually been occurring for several weeks now, but this latest round began when TD Canada Trust raised their special 5-year closed rate a tenth of a percentage point to 3.39%. Scotiabank and Royal Bank of Canada (RBC) followed suit almost immediately, announcing rate increases the next day. Scotiabank raised their special discounted 2-year, 4-year, 7-year and 10-year fixed mortgage rates by a tenth of a percentage point. Their 4-year fixed rate now stands at 3.09%. RBC raised their special discounted 4-year, 5-year and 7-year rates by two tenths of a percentage point to 3.29%, 3.39%, and 3.79% respectively. RBC also announced that their posted 3-year rate would go up a tenth of a percentage point soon.
Rising interest rates: Consumers, investors face sudden shift – The Globe and Mail
Since the financial crisis in 2008, interest rates in Canada have stayed exceptionally low as bond yields fell to shockingly low levels. Recently, however, bond yields have been rising at a torrent pace, resulting in rising mortgage rates. Now, the major question is whether this rate spike will hold or if bond yields will lower again. The Bank of Canada’s key interest rate isn’t expected to change anytime soon, but government bond yields move with the market and many financial products – including mortgages – are affected by these movements. Mortgage rates were at historic lows before, which lured many Canadians into the housing market. However, as consumer debt rose, Jim Flaherty took measures to attempt to decrease lending. These measures were somewhat effective, but changes in the market are now leading to less lending, easing the government’s concerns.
Home building to pick up pace later this year: CMHC – Financial Post
New home construction is expected to gain momentum near the end of 2013 and into 2014. The Canadian Mortgage and Housing Corporation (CMHC) stated that employment, economic growth and migration are increasing the demand for housing. Canada’s housing market slowed dramatically mid-2012, after government regulations tightened mortgage lending rules, but the market has been rebounding over the last couple of months. “So far in 2013, the average monthly growth rates of MLS (multiple listing service) sales, new listings and prices have all been increasing. This follows a period of average monthly declines that held sway over the second half of 2012,” said Mathieu Laberge, Deputy Chief Economist at CMHC. Housing starts and resales will be down this year compared to 2012, but the figures are forecasted to be higher in 2014. These forecasts are the latest sign that the housing market will avoid a major correction.
INTEREST RATES IN CANADA
A look at current mortgage interest rates and 5-year mortgage rate history.
The average discounted mortgage rates in Canada in 2013:
A history of weekly 5-year fixed mortgage rates and 5-year variable mortgage rates.