Print This Post

Introducing Integrated Mortgage Planners’ New Monday Morning Interest Rate Update (April 4, 2011)

Monday Morning Interest Rate Update for April 4, 2011

by David Larock

I am pleased to introduce a new feature on my blog.

To help you kick start your week, I will now provide a brief commentary on what’s happening with interest rates each Monday morning. We’ll cover the week that just was, talk about what’s ahead, and offer insights on overall trends.

The unknown impact of several global events continues to create volatility in the markets. The real economic cost of Japan’s unfolding multi-layered crisis is still unknown, instability in places like Libya, Bahrain and Syria is keeping upward pressure on oil prices, and fears of sovereign debt defaults in Europe (Ireland, Portugal, Greece) aren’t going away.

Fixed rates, not surprisingly under these conditions, have bounced around a lot recently. In the first two weeks of March, five-year government of Canada bond yields plunged 41 bps and in the last two weeks of the month they shot back up by 31 bps. If that most recent trend continues, we could well see an increase in fixed mortgage rates by the end of the week.

Variable rates aren’t expected to go anywhere now that the federal election cycle is in full swing. Consensus forecasts now predict the first increase in the Bank of Canada’s overnight rate (which bank prime rates are based on) in the late summer or fall of this year (my money is on the fall or later).

The bottom line:If you see a fixed rate mortgage in your near future, get pre-approved ASAP and lock in today’s rates while you still can (at no cost).

David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.
One Comment
  1. Never mind today’s rates; what do you think rates will be when borrowers renew? Borrowers need to use a stress test to see how their monthly cash flow budgets will be affected when rates get back to normal when they renew. Yes, a stress test!

Leave a Reply

Note: Your e-mail address will never be published.

Sign up for Dave’s Monday Morning Updates
To get regular updates from Dave the Mortgage Broker, please sign up below.