The Bank of Canada is on the inflation offensive and bond yields are rising. It’s not the best environment if you’re hoping for fixed rate cuts.
The yield on the 5-year bond has catapulted 21 basis points (0.21%) in the last 24 hours. It hasn’t jumped that much in over four years. In fact, in 2549 trading days over the past 10 years, there’s been only eight other times the 5-year yield has closed this much higher.
Now we’re getting word that one of the biggest non-bank lenders will raise their fixed rates tomorrow. We’ll have to wait and see if the commercial banks follow suit. Hopefully they don’t but be prepared that they very well might.
If you’re in the market for a fixed mortgage, there are still a few lenders under 5% on a 5-year fixed. Yet, a lot of borrowers are still out there waiting for rates to fall further. If this is you, it may be time to ask yourself if it’s really worth holding out for an extra 1/4% or so.