Posts from the ‘Monday Morning Mortgage Rate Updates’ Category

Last week was a relatively uneventful one for the factor's affecting Canadian mortgage rates so today’s post highlights five key questions that borrowers should be focusing on as we look toward the fall real-estate market.

While the latest Canadian headline employment number came in a little lower than expected, the underlying details in the July employment data were encouraging. Bluntly put, if you’re looking for mortgage-rate implications there is nothing in the latest data that would discourage the Bank of Canada (BoC) from increasing its policy rate by another 0.25% before the end of the year, but that said, there also weren’t any new indications that our average labour costs are increasing to a degree that would require the Bank to accelerate its rate-hike timetable further. Here is a summary of the key details from the latest report.

Last Friday we learned that Canadian GDP grew by 0.6% in May, which was three times the consensus estimate of 0.2% for the month. It now looks as if our second-quarter growth rate will come close to matching the 3.7% rate we saw in the first quarter (which led the G7 countries). Interestingly, while Government of Canada (GoC) bond yields initially surged higher on the news, they actually closed lower by end of day on Friday. While that may seem counterintuitive, because bond yields should rise if investors expect higher interest rates in future, here are some of the factors that may have contributed to that outcome.

Market watchers (and mortgage borrowers) are looking for signs that reinforce the view that the BoC will continue to raise rates - and suddenly every positive economic data point is being interpreted as further proof that more near-term rate hikes are inevitable. In today’s post I am going to put on my contrarian hat (it’s never too far from reach) and make the case that the consensus is now overestimating future path for Canadian mortgage rates.

The Bank of Canada (BoC) raised its overnight rate by 0.25% last Wednesday, as expected, and lenders wasted no time in increasing their prime rates, on which our variable-rate mortgages are priced, by the same amount. The key question now is what happens next? Should we expect more increases by the BoC at their upcoming meetings? Or will the BoC adopt a more cautious wait-and-see approach? How will our economy, with its newfound momentum still far from assured, respond?

Last week’s Canadian and U.S. employment data make it a virtual certainty that both the Bank of Canada and the U.S. Federal Reserve will raise rates this month. In today’s post I provide the highlights from the latest employment reports for both countries and discuss the implications for both our fixed and variable mortgage rates.

Last week the futures market raised the odds of a Bank of Canada rate rise at its July meeting to better than 50% and the Loonie soared against the Greenback, reaching a nine-month high. Government of Canada (GoC) bond yields surged higher and mortgage lenders wasted no time, quickly raising their fixed rates, which are priced on GoC bond yields, in response. In today’s post, I’ll explain why the BoC is planning to raise its overnight rate soon, offer my take on the impacts that this will have on our economy, and most urgently, offer my two cents on whether variable-rate borrowers should now convert to a fixed-rate mortgage.

Is the Bank of Canada (BoC) really about to begin raising interest rates as some market watchers now believe? Today's post looks at the latest inflation data and explains why the BoC might not be able to raise rates even if it wants to.