Given the uncertainly in the Canadian economy, it looks like the number of rate increases are going fewer and father apart, with most banks only expecting only one more late 2018. The big surprise in the mortgage market is that the major banks are still offering prime – 0.95% or better, and monolines are still offering rates as low as low at 2.41% (prime – 1.29%) on insured and insurable mortgages. Many consumers are taking the variable option with such deep discounts. I still see the discount offered on variable mortgages to remain flat over the next few months.
Based on a flat job report, slowing GDP, a trade war with the US and NAFTA slowly going over a cliff the risks to the economy are quietly increasing, and as such bond yields are flat since the start of 2018. However, the 5 year fixed rates were quick to increase in the first half of 2018 but have not dropped as quickly, and are currently 20bp higher than the start of 2018, thus I expect if yields remain at the current level we should flat to slightly lower rates over the next few weeks.
Shawn Stillman, CPA, CA
Mortgage Outlet Inc. #12628