Banks in Canada face economic signals of conflict every week each year, causing Canadians to guess what they will next and trigger rapid changes in mortgage rates.
After weeks of a minimum 5-year fixed rate of more than 4% fixed rates, there are now several lenders offering options in the higher 3% range, usually for high-rate borrowers.
“There was a two-month period, three periods with a lot of interest rates…and suddenly, about two weeks went into four,” said Ron Butler, whom Butler mortgaged. “Then, bond yields fell by about 25 basis points, and now we’re back to this very radical state.”
Butler noted that while not every lender follows the example, there has been a term that has been priced under 4% again in the past few days, and this trend is easy to swing back.
“Here and in the U.S., every news item related to interest rates can trigger changes in bond yields and interest rates,” Butler said. “What we urge people to understand is that this is volatile; rates can all be restored to a quarter soon.”
Economic Signals of Conflict
The current volatility is not only driven by trade wars and long-term policy uncertainty, although both work.
According to TMG’s Rate Expert Ryan Sims, the market is still trying to figure out how past changes in trade policy and leadership systems affect Canada and the United States.
“We have two opposing forces right now, and the bond market is reacting to every report,” he said. “You’re gradually crawling in Canada, but then you also get the horrible job numbers we saw last week.”
High inflation often prompts Canadian banks to raise interest rates, while weak jobs and slowdowns point to cuts. What’s unusual now is that both forces appear immediately, Sims said.
What’s more complicated is the economic situation in the United States, which directly affects Canada’s five-year bond yields, and with it a fixed mortgage. Although some cracks began to form, the U.S. economy seemed to exceed expectations.
“Whether you agree with the current government or not, the data is strong – employment is healthy, GDP is growing with good editing, inflation is pretty disgusting now – so I don’t think you’re going to lower your tax rates from everyone in the U.S. financing this year,” Sims explained. “It’s hard for Canadian banks to cut when the U.S. Federal Reserve doesn’t cut it.”
Even though Canadian banks have little inclined to lower their policy rates, which drives the best rates and variable borrowing costs, Canada’s big banks have been lowering mortgage rates after winning renewals earlier hikes to win slower markets.
“They are very competitive in interest rates, which makes sense because they will get some market share, and they now have clients who can cross-open bank accounts, investment accounts, credit cards,” Sims said. “When we get close,” he said. [their fiscal year-end on] On October 31, you will see many banks want to gain market share and get real risk profiles as it can help their average. ”
Therefore, Sims recommends that customers use this competitiveness to play to their strengths. He said: “I told the client to call their bank and said: ‘I’m working with a broker, I’m actively shopping and giving me the best deals; you have a chance.’
The best borrower choice now
Since the market changes every few weeks and there is little clarity on its long-term direction, experts recommend that borrowers make decisions based on their own risk profile.
“I prefer variables, the only reason I have a free option to lock at any point in time,” Sims said. “If I see inflation is not disappointed, I need to lock it, I can do it, but if I lock it now and evaluate the situation, I will face high [prepayment] Punishment. ”
Sims added that if Canadians face widespread unemployment or economic pressure in the coming years, variable options may offer greater flexibility, while a more difficult challenge under a fixed mortgage.
But Robert McLister, a mortgage strategist at MortgageLogic.News, warns that only those who are ready to closely monitor the market and act quickly can consider variable interest rates in today’s environment.
“Unless you are financially bulletproof and require shorter fine flexibility, make the variables easy,” he advises. “If you use today’s rates and forward rate forecasts to shape their performance, their performance advantages are limited for most people. Increase the dangers of inflation and financial mismanagement in Ottawa, and their appeal is further narrowed.”
Instead, McLister recommends that most people have a fixed-rate mortgage of three to five years, or a mixed option for those with more interest in risk.
“If you shop or refinance at home, get a long enough rate,” he added. “The key is: don’t bet on ranch anymore.” [interest rate] Free from here. ”
Visited 878 times today, 878 times
Bond Earnings Fixed Mortgage Rate Fixed or Variable Jared Lindzon Mortgage Trend Mortgage Tips Rob McLister Ron Butler Ryan Sims
Last modified: August 18, 2025
