Robert McLister: Canadian government bonds hit a four-month high, something mortgage shoppers won’t want to hear
In the short-term, however, the news is mostly good. We saw massive cuts this week to the nation’s leading short-term rates. The default insured two-year fixed plummeted 55 basis points to 4.29 per cent, while the uninsured two-year went full skydiver, freefalling 115 points to 4.39 per cent.
Canada’s most en vogue term, the uninsured three-year fixed, sank 35 basis points to 4.29 per cent. All three of these offers are from Ratehub.
In the five-year fixed market, we saw the lowest advertised uninsured rate dip five basis points to 4.59 per cent while the insured variety rose 10 basis points to 4.14 per cent.
With yields now accelerating their climb, more fixed-rate hikes are likely ahead — especially for the most competitive insured rates. Insured profit margins are usually slimmer, so they tend to react faster to yield moves.
On the variable side, lenders are counting down to Dec. 11’s Bank of Canada meeting. A rate cut seems more certain than gravity. Yet, with inflation potentially bottoming out for a while, what happens after that is anyone’s guess.
The bond market’s current “guess” is two final rate cuts in 2025. That would bring the benchmark prime rate down to 5.20 per cent, after which the Bank of Canada could potentially hit the pause button.
Mortgage rates
The rates displayed below are updated by the end of each day and are sourced from the Canadian Mortgage Rate Survey produced by MortgageLogic.news. Postmedia and Imaginative. Online Inc., parent of MortgageLogic.news, are compensated by certain mortgage providers when you click on their links in the charts.