Is this the turning point for Canada's fixed rates?
True North Mortgage said that its advertised five-year fixed mortgage rate went up several times over the course of Sept. 29, from 1.79% to 1.99% as of the time of its announcement.
Scott Haggar, marketing manager at True North Mortgage, said that this surge might herald a new trend in fixed-rate offerings in Canada.
“After months of lows, and continued historical lows during the pandemic, we’re wondering if this is the turning point for fixed rates,” Haggar said. “We’ve been watching the five-year rate climb several times [on Sept. 29], with many lenders raising their rates.”
However, Haggar stressed that rates remain at historic lows despite the spike in the five-year fixed rate.
Read more: True North Mortgage completes move to new HQ in Calgary
The increases in other lenders came in the wake of their decision to move their fixed mortgage rates down last week. These movements were anticipated by market observers, who reported a “sharp climb” in the Bank of Canada’s long-term bond yields earlier this week.
The BoC’s benchmark five-year bond yields ended up at 1.9%, roughly at pre-pandemic levels and defying the downward trend prevailing over the past few months.
“Rates may still be tempered as Canada sketches out an economic recovery, but with this marked rise in the popular five-year fixed mortgage rate, there’s definitely a change in the mortgage-rate winds,” True North said.
