Date: April 1, 2024

Are Rates Rising? 

After hitting a low of around 3.26% in January, the Government of Canada 5-year bond yield—which typically leads fixed mortgage rates—finished Tuesday’s session at 3.63% after reaching an intraday high of around 3.66%.

Over the last month, the Canadian bond market has seen significant activity, with rates as low as 3.39% to today’s rate of 3.59%, with a peak of 3.67%. 

What does this all mean? 

Why the fluctuation?

Why does it matter? 

It’s important because fluctuations in the Government of Canada’s 5-year bond yield typically influence the fixed mortgage rates.   

Here are a few key things to consider. 

  • The spread between fixed and variable rates is considerable at this time. We have fixed rates as low as 4.84%, and variable rates are at prime—.95% (6.25% as of today), which is a 1.41% spread in rates. This means that we would need about six quarter-point decreases to have the variable rates anywhere near the fixed rates. If I had to take a guess, I could see us seeing maybe one to three rate cuts this year, but six seems unlikely. 
  • Some believe that the fixed rates have dropped too much and too soon. 
  • It’s likely we will see fixed rates increase slightly over the coming week. 
  • We all know that when bond rates go down, the lenders typically take their time trickling those savings down to the consumer, but when bond rates go up, the increases are much quicker

So why does this all matter to you and your action steps?

  • If your mortgage is up for renewal in the next 4-5 months, let’s get those rates held for you now. There is no slacking; let’s jump on it ASAP. It is better to be prepared than to have regrets. 
  • If you are looking to purchase a home, let’s do a full pre-approval and hold that rate for you for the next 120 days 

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