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.

April 2014

Ron Butler
Mortgage Broker at Verico Butler Mortgage
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.

FIXED RATES
Up
VARIABLE RATES
Unchanged

Summary

Lenders may have kicked off the home buying season with mortgage discounts, but it's questionable whether this low-rate environment can be sustainable as global economic trends shift slightly out of favour for safe haven bonds, driving yields and rates higher. On the domestic front, there is no change anticipated from Canada's central bank as growth factors continue to underperform.

Fixed Rates: Up


The typically competitive spring buying season is just heating up in Canada - and some lenders, such as BMO, have introduced discounted rates to kick off the action. However, the expert panel indicates changing global economic trends will counter the possibility of a competitively low interest rate environment, as investors shift their focus from safe haven bonds, driving yields, and fixed rates, higher in the long term.

Variable Rates: Unchanged

Economic growth factors continue to underperform, giving the Bank of Canada no reason to change central interest rates in the April 16th announcement. While a lower loonie may give inflation a small boost, it's not likely this will prompt any change from the bank to the current cost of borrowing.

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First Opinion: Ron Butler

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Ron Butler
R. W. (Ron) Butler is an 18 year veteran of the mortgage brokerage industry with a 35 year career in Canadian Financial Services.
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FIXED RATES
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VARIABLE RATES
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Fixed Rates: Up

Higher bond yield movement after Janet Yellen's somewhat ambiguous remarks should cause fixed rates to trend up slightly. That being said I am not placing a bet on rising fixed rates because we are fast approaching the key spring real estate market in Canada. Banks compete strongly this time of year for their share of that market and rates are normally discounted to be aggressive.

Variable Rates: Unchanged

I don't believe there is any possibility of a central rate increase over the next month, leaving the cost of variable borrowing stable for the time being.

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Next 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
Up
VARIABLE RATES
Unchanged

Fixed Rates: Up

Economic confidence moves in waves, and this causes short-term movements in bond yields. In turn, mortgage interest rates more-or-less follow those movements. A surge in stock markets, on top of a rise in consumer confidence indexes in the U.S., hints that economic confidence will be a bit stronger in the near term, which would lead to an uptick in bond yields. As a result, I expect that mortgage rates may rise a bit during the coming month (perhaps five to 10 basis points). Looking farther out, I do not expect a substantial, sustained rise anytime soon, because economic conditions depend on events in the housing market, which remains highly sensitive to interest rates.

Variable Rates: Unchanged

The recent weakening of our dollar will result in a temporary uptick for the Canadian inflation rate, due to cost rises for imported goods. But, the Bank of Canada is likely to view this as a temporary event that does not justify any change in the base rates that it controls.

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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
Up
VARIABLE RATES
Unchanged

Fixed Rates: Up

Bond yields have been up in the last few days, and as a result, I expect mortgage rates to increase subtly over the next few days and weeks. The recent sub three per cent fixed rate offerings will be short lived once the summer market kicks in. The recent devaluing of the Canadian dollar greatly reduces the likelihood that the Bank of Canada will reduce the Prime rate.

Variable Rates: Unchanged

We will have to see a sustained recovery in the U.S. economic situation before we start seeing the banks change their variable rates. 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
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VARIABLE RATES
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Fixed Rates: Unchanged

The 3-5 year bond yield is bouncing around a very narrow range, while the CPI was 1.1% for the last twelve months. CIBC Benjamin Tal's call for significantly greater housing and mortgage information disclosure, and a new Minister of Finance in an embattled government that wants new "announcables" to change the channel – which could be enabled relatively quickly by regulation - produce a much more clear understanding that could lead to further changes in the mortgage underwriting rules.

Variable Rates: Unchanged

Inflation is still below the Bank of Canada upper range and the economy is still underperforming – and will for quite some time to come according to Governor Poloz in his latest fascinating speech. More importantly, the depreciation of the loonie has given the central bank more degrees of freedom, ensuring no rate increase or decrease for the new future.

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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
Unchanged
VARIABLE RATES
Unchanged

Fixed Rates: Unchanged

The big banks have ramped up the marketing machines for the key spring home buying season led by BMO's re-introduction of the 2.99 per cent five-year fixed rate special. This has resulted in an extremely aggressive mortgage rate environment with mortgage brokers advertising sub 2.99 per cent 5 year rates and other banks discounting their 4 year fixed rates down to as low as 2.94%. Even with BMO's special ending in mid-April, I believe that rates will continue to be competitive this spring and will remain unchanged in the short term.

Variable Rates: Unchanged

Recent comments from the U.S Fed suggest American central rates may move in early 2015 - as Canadian interest rates traditionally lag our U.S. counterparts, there's no reason to believe the Bank of Canada will change their monetary policy in the upcoming announcement on April 16. I expect variable mortgage rates to remain close to their current levels 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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