The biggest driver for determining long term fixed-rate mortgages is the Canada five-year bond yield.JONATHAN HAYWARD/The Canadian Press
Mortgage rates may be entering a relatively idle period in Canada, and Friday’s gross domestic product report will give further clues to what we can expect from the Bank of Canada’s rate decision next month.
Markets and economists largely expect the central bank to keep its key lending rate at 2.25 per cent for the foreseeable future. The BoC itself has signaled that the current rate-cutting cycle could be over if the economy performs as expected. That should keep variable mortgage rates steady for the time being.
Meanwhile, the Canada five-year bond yield is the biggest driver for determining long term fixed-rate mortgages. Yields have been hovering around the 2.7-per-cent mark, and five-year fixed rates should remain steady if that continues.
In a note to clients, Royal Bank of Canada forecast that Friday’s GDP report will show 0.5-per-cent growth for the third quarter, which would partly reverse the second quarter’s 1.6-per-cent contraction.
RBC said resilient domestic demand, growth in the housing market and increasing consumer spending among RBC debit cardholders are reasons why it expects modest GDP growth.
That note also pointed out that we’re missing a key economic data point owing to the U.S. government shutdown: Canada’s international trade data, which relies partly on the U.S. Census Bureau for numbers. That report will now be released in early December.
The Bank of Canada will make its final rate decision for 2025 on Dec. 10, but markets have mostly priced in expectations that it will hold rates for now.
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Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on Nov. 27.
