RateSupermarket.ca’s expert panel say lenders are taking a wait-and-see approach
Good news for early spring mortgage borrowers: interest rates won’t be rising along with the thermometer. While early signs of economic improvement are promising, consumer lenders and the central bank alike are holding their breath, looking to the Liberal stimulus announcement later this month before adjusting the cost of borrowing. This means both fixed and variable mortgage rate shoppers will access great discounts this month, and perhaps more to come as the spring mortgage wars traditionally heat up this season.
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Fixed Mortgage Rates: Unchanged
Government of Canada bond yields remain in high demand among investors seeking stability, pushing yields to new depths. While recent news of tepid economic growth eased yields slightly higher over last four weeks, they remain well below the 1% threshold – and only a few precious basis points above Prime. This won’t lead to further discounts for fixed mortgage rates, however – lenders have resisted the trend set by yields for several months now, as rates are already at competitively low levels. Such discounts are expected to remain throughout the month.
Variable Mortgage Rates: Unchanged
The Bank of Canada is in no hurry to further stoke Canadian household debt nor does it wish to shock the system with a premature rate hike, despite encouraging GDP growth reported for Q4 2015. With the federal government to reveal its fiscal stimulus plan later this month, it’s expected the central bank is taking a wait-and-see approach, and will update its stance in its April Monetary Policy Report – once it has had the opportunity to assess the impact from the Liberal’s budget.