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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?

April 2013 Overall Summary

Lenders are unveiling their record low fixed rate offers in advance of the spring mortgage market - though a dramatic dip is not anticipated - as bond yields continue to remain low. Variable mortgage rates are also to remain stable as no change is expected in the Bank of Canada's April 17th interest rate announcement.

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While signs of a heating spring mortgage market were evident last month, with lenders such as BMO reintroducing their 2.99 per cent five-year fixed, mortgage brokers have featured rates as low as 2.74 per cent for weeks. While Government of Canada bond yields continue to trend downward in the midst of global economic unease, a dramatic dip in Canadian fixed mortgage rates is not anticipated.


The Bank of Canada is not anticipated to change the Overnight Lending Rate in the upcoming April 17th announcement, and it's expected that they'll hold steady well into 2014 as a result of lower than expected Canadian economic growth. As a result, variable mortgage rates are not expected to change for the month of April.

This Month's Panelists

Mark Kocaurek - Senior Vice President, ING DIRECT

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The prospect of higher inflation appears to be well in the future and as a result, I believe term bond yields will remain close to their current levels, as will fixed term mortgage rates.

The outlook for Canadian GDP growth over the short to medium term continues to look very tepid. As a result, inflation worries for the Bank of Canada should be far off in the future. The Bank of Canada will be on hold for the foreseeable future with regard to its overnight rate, leading to no change in variable rate mortgage rates.

Dan Eisner - President, True North Mortgage

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Despite the wishes of Jim Flaherty, banks will continue to discount rates to attract new clients. As a result I expect mortgage rates to decrease by .05 to .1 per cent in the next couple of weeks.

Banks and Canadians in general do not seem interested in variable rate options with five-year fixed rates so low. As a result, we don't foresee any changes to the variable rates in the next while.

Mary Zenar - Managing Director of Zenar Financial

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March saw the first signs of a heating spring market as mortgage rate wars were sparked by the reintroduction of BMO's 2.99 per cent five-year fixed rate. While this was only a 0.10 per cent drop from their previous rate, mortgage brokers have offered five-year fixed rates as low as 2.74 per cent for several weeks. I believe they will hold steady for the short term.

The Bank of Canada held the Overnight Lending Rate steady last month, and is not anticipated to raise it in their announcement on April 17th. With expectations that the rate will not change until well into 2014, variable mortgage rates are to remain unchanged for the time being

Dr. Ian Lee - Program Director, Carleton University

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The fourth round of tightening of the mortgage rules announced by Finance Minister Jim Flaherty last year are still having an impact as evidenced by the latest real estate numbers from Toronto and Vancouver, which revealed unit sales down by an average of 18 per cent. This would suggest a decline in mortgage rates through competition via reduced rates. However, the aggressive bully pulpit tactics of the Government of Canada Finance Minister in condemning banks and contacting individual banks for reducing mortgage rates has essentially imposed a de facto price floor around 2.89 per cent to three per cent. No lender wants to risk the wrath of the Finance Minister or the regulator.

The Bank of Canada has no intention in the near term of increasing the bank rate in part because the Canadian and U.S. economies are so anemic, while the EU economy has unemployment levels of 12 per cent. A secondary reason is that Governor Carney is now a lame duck with only a couple of months left in office before departing for London. In these conditions it would be inappropriate to saddle the incoming governor with a policy decision by the departing governor absent a genuine crisis. However, it should be noted that the U.S. economy is demonstrating robustness in some key sectors i.e. housing and automobiles. If this trend continues and starts to impact on our trade and thus the growth rate in Canada, we may see signals suggesting a rate increase.