MORTGAGE NEWS AND INTEREST RATE ANALYSIS
Sept. 10, 2024 Bond Yield Analysis - Where are rates headed?
Government of Canada bond yields, which are the basis for fixed mortgage rates, are continuing their downward path. The yields are slowly breaching the previous lows from 2022 and 2023. Investors and their trading software use previous high and low points in charts as trading signals to either take profits or stop losses. Due to this, when the yields hit previous highs and lows, they often stall or breifly go in the opposite direction as investors adjust their positions.
As we can see in the chart of the 5 year Government of Canada bond yield, which is the basis for 5 year fixed Canadian mortgage rates, the yield has just cleared a previous low, and has 2 more major previous lows to clear. Once these 2 lows have been cleared, based on the chart pattern, we should see a more rapid decrease.
Sept. 4, 2024 - The Bank of Canada Lowers Key Interest Rate
As expected, the Bank of Canada has further reduced the key interest rate by 25 basis points (0.25%), bringing the Prime Rate which variable rates are based on down by 25 basis points as well.
August 20, 2024 - Inflation Falls to 2.50%
Canada's annual inflation rate fell to 2.50% in July, reaching it's lowest level since 2021.
Inflation on shelter prices (rent and mortgage payments) are still a alarmingly high. As rates fall, mortgage costs will fall as well, however it is unlikely that monthly rental amounts will go down, placing continued financial pressure on renters.