Dave Larock in Monday Interest Rate Update, Mortgages and Finance, Home Buying, Toronto Real Estate News Editor's Note: Dave's Monday Morning Interest Rate Update appears on Move Smartly weekly. Check back weekly for analysis that is always ahead of the pack.
Happy Family Day!
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 five basis points last week, closing at 1.65% on Friday. Borrowers who are putting down at least 20% on the purchase of a new home should be able to find a five-year fixed rate in the 3.14% range and borrowers who are putting down less than 20% can now find five-year fixed rates for as low as 3.04% (albeit with more limited terms and conditions).
Five-year variable-rate mortgages are offered at rates as low as prime minus 0.65%, which works out to 2.35% using today’s prime rate of 3.00%. The mortgage qualifying rate (MQR), which is used to underwrite variable-rate mortgage applications, fell ten basis points and is now set at 5.24%. (Here is a post I wrote that explains how the MQR works in detail.)
The Bottom Line: GoC bond yields went up a little last week but not with enough conviction to put upward pressure on our fixed-rate mortgages. Meanwhile there were no new Canadian or U.S. economic data releases last week that would cause me to alter my long-standing view that variable-mortgage rates should stay low for the foreseeable future.
David Larock is an independent mortgage planner and industry insider specializing in helping clients purchase, refinance or renew their mortgages. David's posts appear weekly on this blog (movesmartly.com) and on his own blog integratedmortgageplanners.com/blog). Email Dave