A volatile few months indeed. Now that we are at the end of August, where are interest rates heading?
The 5-year bond yield lowered to under 3% but recently has climbed back over the 3.25% mark. Usually, down or upward pressure on bond yields impacts how banks set fixed-rate mortgages. We have already seen some big banks reduce their 5-year fixed rates by 0.10%.
We will need to watch how the markets perform leading up to and following the next Bank of Canada rate announcement, where most financial experts predict another increase. Hopefully, the last of the increases!
If the prime rate increases and fixed rates lower in the fall, the banks may increase the discount off of prime for their variable rate products. September and October data should give us a better insight into where rates may trend over the 4th quarter and into the new year.
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Next Bank of Canada Announcement: Sept 7, 2022
5-Year Bond Yield
Current Mortgage Rates