Positive Fixed Mortgage Rate Trend
“5 Year Government Of Canada Bond Yield On The Decline Pointing To Lower Fixed Mortgage Rates”
With the continuing drop in the 5 year bond yield, it appears only a matter of time that fixed term mortgage rates are going to do the same.
Fixed mortgage rates are closely linked to the bond market and with the bond yield now at a 5 month low, the correlation with fixed mortgage rates should spark some positive downward movement.
For a look at the most recent yield chart, click on this link …http://www.bloomberg.com/apps/quote?ticker=GCAN5YR:IND
This makes it a positive week overall for the mortgage market with the week starting off with no movement in the Bank of Canada’s overnight lending rate which tends to have a direct impact on variable mortgage rates.
The spread right now between the bond rate and equivalent term mortgage rates are significant enough that competition is likely going to bring rates down in order to grab or maintain market share.
All of this is potentially good news for mortgage holder and mortgage shoppers in Canada.
What type of rate change is likely to take place is hard to predict and it will also vary from region to region in the country, based on competitive forces in each area.
All the financial uncertainty in the world has made it more attractive to hold AAA Canadian Government issued bonds. Bonds have an inverse relationship with interest rates, so as the price of bonds gets bid up higher due to increased demand, the interest rate yield on the bonds drops.
The end result is that mortgage lenders have a cheaper source of money to draw on which should translate sooner than later into lower fixed term mortgage rates.
If you’d like to know more about how these potential rate changes may impact your mortgage situation or requirements, please consult with an experienced mortgage broker to help you stay on top of the expected rate moves.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel