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20 Nov

Bond Market Signalling Mortgage Rates Will Start increasing


Posted by: Adam Sale

Bond Market Signalling Mortgage Rates Will Start Increasing

There’s been recent movement in the government bond market which dictates Canada’s mortgage rates. When bond yields rise mortgage rates tend to follow. Bond yields rise on positive economic outlook, and decline on negative outlook.

Several factors in the recent weeks are creating an optimistic outlook for this year. These are:

1. Positive Vaccine trials 

2. Bank of Canada decreasing their quantitative easing measures

3. Hopes the new American president will bring stability to the world economy

Since the election and the positive news regarding the vaccine trials Canada’s government bond yields have increased by 16%.

What does this mean?

In short, if bonds remain at this level it is likely we’ll see mortgage rates begin increasing. The amount at which these mortgage rates will increase is speculative. Personally, I do not see these rates rising much more than 0.15%-0.20%. Even if these rates rise, mortgages are the cheapest they’ve every been!

Current rates being offered on the market are:

High ratio @ 1.65% – 1.89%

Insurable @ 1.65% – 1.89% (dependant on down-payment amount)

Conventional @ 1.79% – 2.09% (dependant on lending scenario)

If you are thinking about purchasing a home in the next 4-months I suggest setting up a pre-approval to lock-in a low-rate incase rates start rising in the short term.

To set-up a virtual pre-approval please contact me @ 778-215-4121 or by email