So far, Canada’s lowest nationally advertised mortgage rates haven’t been affected this week. If U.S. yields keep making new long-term highs, however, their magnetic pull on Canadian rates could drive our mortgage costs higher.Damian Dovarganes/The Associated Press
A Ramp Up in U.S. Yields Keeps Pressure on Canadian Rates
U.S. Treasury yields are hitting multiyear highs and that’s keeping a floor under Canadian interest rates.
So far, Canada’s lowest nationally advertised mortgage rates haven’t been affected this week. If U.S. yields keep making new long-term highs, however, their magnetic pull on Canadian rates could drive our mortgage costs higher.
Data from CanDeal DNA show the bond market now expecting a better than even chance of one more Bank of Canada rate hike.
More interesting, however, is the fact these implied future rates suggest our prime rate won’t fall below today’s 7.2 per cent until 2025.
That would make for some very unhappy floating-rate mortgagors. Albeit, if the economy slows as expected through year-end, those rate-cut expectations could be pulled forward.
Rates were sourced from the MortgageLogic.news Canadian Mortgage Rate Survey on Oct. 19, 2023. We include only providers who advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20 per cent down payment or switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1-million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.
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Robert McLister