Variable mortgage rates are falling, but fixed rates aren’t ready to follow suit
Robert McLister: In order for them to fall much more, markets need to believe inflation will substantially undershoot target and unemployment will spike
Bond traders nailed Wednesday’s 50 basis point Bank of Canada rate cut like a Vegas bookie who knows the fix is in. Canada’s lowest nationally advertised variable rates are now down to 4.70 per cent (insured) and 5.10 per cent (uninsured).
tap here to see other videos from our team.
Variable mortgage rates are falling, but fixed rates aren’t ready to follow suit Back to video
tap here to see other videos from our team.
Compare those to the lowest publicly quoted fixed rates, which are five-year terms at a so-so 4.09 per cent (insured) and 4.64 per cent (uninsured).
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
It’s questionable how much progress we’ll make on inflation in the next quarter or so. Job numbers have been crushing expectations and the more North America’s economy flexes its muscles, the less likely we’ll see the prime rate dip more than 50 basis points.
Fixed rates are a different animal, however, one not controlled directly by the Bank of Canada. In order for fixed rates to fall much more, markets need to believe inflation will substantially undershoot target and unemployment will spike. The jury’s out on those.
Meanwhile, even with the central bank playing Santa Claus with rates, it’s not getting any easier to qualify for a mortgage. The government’s stress test still requires borrowers to prove they can afford a rate in the six per cent range, depending on the home loan. For the real estate market to really take flight, it needs borrowers who can get approved for materially heftier loans. That would require a stress test rate down in the mid-fives or below.
Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
Mortgage rates
The rates displayed below are updated by the end of each day and are sourced from the Canadian Mortgage Rate Survey produced by MortgageLogic.news. Postmedia and Imaginative. Online Inc., parent of MortgageLogic.news, are compensated by certain mortgage providers when you click on their links in the charts.
Can’t view the charts on this page? Try clicking here.
