A 'For Sale' sign sits in front of a house, in Toronto, in April, 2010.Darren Calabrese/The Canadian Press
Markets are starting to price in higher odds that the Bank of Canada will lower rates when it convenes at the end of this month.
Analysis of financial markets by LSEG currently predicts a 64-per-cent chance of a 25-basis-point cut on Oct. 29, up from odds of only 50 per cent last week. (There are 100 basis points in a single percentage point.)
Ron Butler, founder of Butler Mortgage, said the increased expectations of a cut could be a result of markets anticipating bad numbers in the coming Labour Force Survey, which will be released on Friday.
It could also be a reaction to recent comments from U.S. Secretary of Commerce Howard Lutnick, who said the United States is no longer interested in buying Canadian-made cars or returning to the two countries’ former free-trade agreement.
The Labour Force Survey on Friday and inflation figures later in the month will further paint a picture of what the Bank of Canada will decide on Oct. 29.
Canada’s gross domestic product report was the last major data set, coming in two weeks ago, and results were slightly stronger than expected with 0.2-per-cent growth. However, some economists still believe that another rate cut will be necessary to support the Canadian economy.
Another rate cut could bring variable mortgages back to a cheaper level than any available fixed mortgage. Currently, Ratehub.ca shows the lowest available variable-rate mortgage at 3.70 per cent for a five-year term. The cheapest fixed rate is for a three-year term at 3.69 per cent, while the cheapest five-year term sits at 3.89 per cent.
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 Oct. 9.
