Should You Choose a Fixed or Variable Mortgage Rate Today? Monday Morning Interest Rate Update (February 29, 2016)

Remember when central bankers had the world convinced that quantitative easing (QE) was the solution to sluggish economic growth? Well, the proof of the pudding is in the eating and after years of QE in many countries, there is considerable evidence that QE has hurt growth rather than helped it. Today, central bankers are starting to talk about a new cure-all solution – negative interest rates. Their thinking goes something like this: QE hasn’t worked because all of the new money it created isn’t actively circulating throughout the economies that it was supposed to help stimulate (referred to by economists as low monetary velocity). If negative interest rates manage to force that money off of the banks’ bulging balance sheets, growth will pick up and this will lead […]

Happy Family Day memories. I used the holiday yesterday for its stated purpose so today’s post will be short and sweet. Five-year Government of Canada (GoC) bond yields rose by one basis point last week, closing at 0.59% on Friday. Five-year fixed-rate mortgages are available in the 2.49% to 2.74% range, depending on the terms and conditions that are important to you, and five-year fixed pre-approvals are offered at rates as low as 2.79%. Five-year variable-rate mortgages are available in the prime minus 0.40% to prime minus 0.30% range, which translates into rates of 2.30% to 2.40% using today’s prime rate of 2.70%. The Bottom Line: Rising instability risks in China, Japan, the euro zone and across many emerging-market economies are making investors increasingly nervous about what lies ahead. […]

Canadian and U.S. Employment Lower Than Expected in January - Monday Morning Interest Rate Update (February 8, 2016)

The U.S. Federal Reserve left its policy rate unchanged last week, as was widely expected, but it also surprised markets by adopting a far more dovish tone about the U.S. economy’s prospects. How quickly circumstances can change. When the Fed raised its policy rate in December, its rate-setting committee had predicted that there would be four more rate hikes in 2016. Now, just a month later, the Fed sounds much more cautious and U.S. fourth-quarter GDP growth just clocked in at a paltry 0.7%. Investors are now betting that the next Fed rate hike won’t be until February 2017 (according to CME Group 30-Day Fed Fund futures prices). The U.S. Fed’s policy statements matter to Canadian mortgage borrowers because our economies are deeply interlinked. That means that while […]

Why the Bank of Canada Didn’t Deliver Its Expected Rate Cut - Monday Morning Interest Rate Update (January 25, 2016)

Why Aren’t Canadian Mortgage Rates Falling When They Should? - Monday Morning Interest Rate Update (January 18, 2016)

What the Latest Canadian and U.S. Employment Data Mean for Our Mortgage Rates - Monday Morning Interest Rate Update (January 11, 2016)