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Canadian Mortgage News
|Posted on January 25, 2013 at 2:27 PM|
Link to original article at bottom of page.
Author: Rob McLister, CMT
If you want to know what’s moving Canadian mortgage rates, watch the American news. The reason? Canadian bonds are 95% correlated with American bonds (Treasuries) and bond yields are 97% correlated with 5-year fixed mortgage rates. (See: Yields and Fixed Mortgage Rates) In other words, Canadian rates are married to U.S. rates. So it’s no wonder that our mortgage rates are being shifted by things like the U.S. debt ceiling and fiscal cliff. Below is a list of factors weighing on mortgage rates right now:
Rates are in a tug of war between bullish factors (those lifting yields) and bearish factors (those depressing yields). Here’s a current summary of each:
Bullish factors for rates
Bearish factors for rates
Wildcards for rates
At the moment, there is maximum uncertainty. While nobody expects major rate increases near-term, a 20-30 basis point increase would shock no one.
So if you need a mortgage in the next six months, don’t hesitate to lock in at today’s epic low rates.
Rob McLister, CMT