U.S. interest rates drag Canadian mortgages down with them

THE Bank of Canada may be in pause mode, but the The US Federal Reserve is absolutely not. In fact, markets are now pricing in another percentage point of US rate hikes by July.

This pushes up the forecast for maximum interest rates, pushes up US bond yields and drives up Canadian rates. Once again, Canada’s five-year yield – which dominates fixed mortgage rates – is approaching its October peak, which was its highest level in a decade and a half.

The result will be immediately superior fixed mortgage rates. Several lenders are raising their mortgage prices on Thursday and Friday.

McLister: When your bank suggests you lock in your variable rate mortgage, they have an angle

All of this has only a dubious impact on the Bank of Canada. Markets are only pricing in a one percent chance of a rate hike at the next BoC meeting next Wednesday.

Most economists believe that the strong economic start of 2023 will soon stall under the weight of oppressive interest rates and high rates. consumer debt. If they are right, mortgage rates could turn around lower before too long. And hoping they’re right.

The lowest mortgage rates available nationwide

1 year fixed 5.74% Ratehub 5.69% Mortgage Quest
2 year fixed 5.64% Ratehub 5.44% Mortgage Quest
fixed 3 years 5.24% Investors Group 4.99% Radius Financial
4 years fixed 5.19% Investors Group 4.84% Ratehub
5 years fixed 5.14% Mortgage Quest 4.59% Something
10 years fixed 5.94% HSBC 5.34% Something
Variable 6.10% HSBC 5.50% The True North
5 year old hybrid 5.65% HSBC 6.06% Scotia eHOME
HELOC* 6.70% HSBC n / A n / A

Source: Robert McLister; data as of March 2

Rates are as of March 2, 2023, from providers that advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than 20% down payment or those transferring 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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