Mortgage Rate Outlook Panel

Our panel of mortgage experts share their views on Canadian mortgage rate trends each month by answering this question: What is your outlook for Canadian mortgage rates over the next 30-45 days?

View this month's answers below.

November 2014

Will Dunning
Chief Economist at CAAMP
Dan Eisner
President, True North Mortgage
Dr. Ian Lee
Program Director, Carleton University
Kelvin Mangaroo
President of RateSupermarket.ca
Panel Consensus

Our panel's final verdict for this month's fixed and variable mortgage rates.

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Summary

No November movement is expected for either fixed or variable rates; yield activity has been minimal, prompting no change to fixed rate pricing. Canada's prime rate remains in limbo as the Bank of Canada states no plan to alter variable rates in the near future, and no action is taken by the U.S. Federal Reserve.

Fixed Rates: Unchanged

Five-year Government of Canada yields have moved within a very tight spread, but mortgage rates, which usually move in conjunction with yields, have not followed suit. It's expected that the current competitive pricing environment will last throughout the year.

Variable Rates: Unchanged

Lingering geo-political tensions continue to put a damper on Canadian trade and home-grown economic improvement. As the Bank of Canada has stated the need for long-term stimulus, and the U.S. Federal Reserve makes no rate changes south of the border, it's expected that variable rates will remain untouched throughout November.

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First Opinion: Will Dunning

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Will Dunning
Will Dunning is the Chief Economist for the Canadian Association of Accredited Mortgage Professionals, and operates his own consulting firm, Will Dunning Inc., which specializes in economic and demographic research.
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Fixed Rates: Unchanged

During the past two months there have been two sharp swings in expectations about the world economy that have resulted in unexpected moves for stock markets and for bonds. During September, yields for five-year Government of Canada bonds jumped by quarter point, but then during late September to mid-October they fell by about 0.40 points. Now they are returning to the level seen before these ructions. The consequence is that mortgage rates have not changed materially.
While financial markets remain twitchy, economic conditions continue to improve gradually. That said, there is still a long way to go until there will be a need for any substantial and sustained rise in rates. My expectation is that by the end of 2015, rates for five-year fixed rate mortgages might be about one-half point higher than at present.

Variable Rates: Unchanged

The Bank of Canada and the U.S. Federal Reserve clearly expect that they will not be raising their administered rates anytime soon, which means that interest costs for variable rate mortgages rates should change very little during the coming year. Analysts continue to expect that any rises for these administered rates might start about mid-2015.

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Next Opinion: Dan Eisner

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Dan Eisner, MBA, AMP
With an innovative vision, Dan has grown True North Mortgage in over 7 locations across Canada.
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Fixed Rates: Unchanged

Mortgage rates almost looked like they were going to move but the bond yields didn't stabilize at the new pricing point. Thus, no change in mortgage rates are coming.

Variable Rates: Unchanged

Combined with the tepid world economy and the lower oil prices, the central bank has little reason to increase prime. As a result, we don't foresee any changes to the variable rates in the next while.

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Next Opinion: Dr. Ian Lee

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Dr. Ian Lee
Ian Lee is the Director of the MBA program at the Sprott School of Business and the Chair of the MBA Committee.
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Fixed Rates: Unchanged

The five-year Government of Canada yield has been moving around a very narrow band of approximately 1.35 per cent to 1.45 per cent. This movement does not suggest a change in fixed rates.

Variable Rates: Unchanged

The Fall Monetary Policy Report released on October 22. Two key phrases stood out in the Executive Summary: "Underlying inflationary pressures are muted, given the persistent slack in the economy". Then the Governing Council said, "However, the profile is weaker than in July and is diverging across regions. Growth remains reliant on exceptional monetary policy stimulus". These words clearly do not suggest any increase in interest rates any time soon.

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Next Opinion: Kelvin Mangaroo

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Kelvin Mangaroo
Kelvin Mangaroo is the President of RateSupermarket.ca, Canada's independent financial rates comparison site.
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FIXED RATES
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VARIABLE RATES
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Fixed Rates: Unchanged

Government of Canada bond yields, which set the tone for fixed mortgage pricing, have jumped 11% in the past month. Fixed rates didn't follow the drop on the way down, so they've been relatively flat and will remain competitive as the housing market enters the slower winter months.

Variable Rates: Unchanged

While The U.S. Federal Reserve officially ended its bond-buying program last month, they have yet to implement any change to central interest rates, providing no incentive for Canadian rates to do so. An unstable global outlook due to geopolitical tensions have also contributed to this immobility; earlier this month, Bank of Canada Governor Stephen Poloz made comments that continued stimulus may be necessary, even after Canada's economy strengthens. As a result, variable rates will remain relatively unchanged in the short term.

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About The Panel

RateSupermarket.ca surveys top mortgage experts to gauge their thoughts on the latest mortgage rate trends and if they believe Canadian fixed mortgage rates and variable mortgage rates will go up, down or remain unchanged over the next 30-45 days. The Mortgage Rate Outlook Panel takes into account current market conditions on the day it is released and its members include mortgage bankers, mortgage brokers, economic professionals and other industry experts.

The Mortgage Rate Outlook is not a mortgage rates forecast or prediction but are the sole thoughts and opinions of the panel members. RateSupermarket.ca is not a mortgage broker or lender and does not support or endorse any one of the opinions shared by the panel members. Please seek expert advice before making any financial decisions.

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