Mortgage and interest rate outlook
HM-INT-0016
Rate relief may be near its floor
Recent ATB commentary and market pricing suggest the Bank of Canada may be near the bottom of the current rate cycle. Current conditions do not support assuming that materially cheaper financing is just around the corner, making bond yields, CGF futures and CORRA expectations important indicators to keep watching.
30-second version
What changed?
The Bank of Canada policy rate remains stable, but market expectations have become less confident about further easing.
Longer term bond yields continue to matter for fixed mortgage pricing.
Waiting for significantly lower borrowing costs is not a risk free strategy for buyers or investors.
Confirmed facts
What the source record confirms.
These details come from the supporting records listed with this Intelligence Record.
Policy backdrop
The Bank of Canada policy rate remains unchanged while major economic forecasters continue to debate whether the next meaningful move will eventually be higher or lower.
Fixed rate signal
Five year Government of Canada bond yields remain a key market input for fixed mortgage pricing and should be watched alongside CGF futures.
Variable rate signal
Three month CORRA futures provide a market based view of the expected Bank of Canada policy path and can change before lender pricing does.
Hoffos | Menzies interpretation
Why this may matter.
This section is analysis. It is separated from the confirmed facts above.
- 01
Clients should avoid assuming that a large new round of rate cuts is guaranteed.
- 02
A stable policy rate can still coexist with changing fixed mortgage rates if bond yields move.
- 03
For qualified buyers, the decision to purchase should be based on affordability, property value and time horizon rather than a single rate forecast.
Monitoring
What we are watching next.
Five year Government of Canada benchmark yield.
CGF five year Government of Canada bond futures.
Three month CORRA futures and the implied Bank of Canada path.
Bank of Canada decisions and major lender rate announcements.
Sources
Read the supporting records.
Connected Intelligence
Continue with the part connected to your decision.
Review and expiry rule
This record stays dated.
Review after each Bank of Canada rate decision or sooner if the five year Canada yield, CGF futures or CORRA path changes materially.
Important information
This Intelligence Record is general information, not mortgage, financial or investment advice. Rates and lender pricing can change without notice and should be confirmed for each borrower and transaction.
Back to the Intelligence Centre