Markets are now pricing in 80-per-cent odds of a quarter percentage point cut on Sept. 17, according to data from LSEG.JONATHAN HAYWARD/The Canadian Press
Weak economic data in Canada are drastically changing mortgage rate outlooks for both variable and fixed rate mortgages.
The Canada five-year bond yield – which heavily influences five-year fixed mortgage rates – reached its lowest point since May, which could prompt lenders to decrease their rates.
Meanwhile, a drop in the Canada three-year bond yield in recent weeks has already resulted in some of the cheapest three-year fixed mortgage rates coming down to the 3.6-per-cent level.
The decrease in yields is a result of higher expectations that the Bank of Canada will cut its headline interest rate next week, after Canadian gross domestic product numbers came back weaker than expected. Markets are now pricing in 80-per-cent odds of a quarter-percentage-point cut on Sept. 17, according to data from LSEG. The data also show that two or three rate cuts are expected between now and the end of 2026.
If those rate cuts materialize, variable rate mortgages could once again become notably cheaper than fixed rate mortgages. Currently, five-year fixed and variable rates are at similar levels.
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 Sept. 11.
