Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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Variable discounts are vanishing fast from the market. As Mark Carney was predicting a stable short term rate scenario few days ago, some lenders were taking notes.

As of now Scotia’s web site still says that it is offering Scotia Flex Value Mortgage – Closed 5 Year Term Special at 2.90%, but in a late news release, Scotia said that the posted variable rate will go up to 3.1% from 3% on 28th. November, 2011.

Other banks like BMO, is still offering 5 years variable closed at 3%.

So, it is quite apparent that the variable rate mortgages will soon be offered at a premium, not at a discounted rate.

As far as fixed rates are concerned, they are also showing slow upward trend as the bond market continues to be very unstable. Canadian bond yield for 5 year bond was at 1.41% today compared to 1.34% yesterday. It is a significant jump in yield.


In a News release today, RBC said that the housing affordability in Canada has improved in the third quarter of 2011.

In the report it explained;

Lower mortgage rates lending a helping hand

Lower mortgage rates, in turn, contributed to lessening the costs of owning a home in Canada. Following two consecutive quarters of deterioration, housing affordability improved broadly, albeit modestly, in Canada in the third quarter.


At the same time, in a commentry, Robert Kavcic, Economist, BMO Capital Markets said;

Low mortgage rates are offsetting weaker consumer confidence and cooling job growth, Relatively stable sales and price trends are likely in the year ahead.

What can be seen from all these information, is that the future rates – in short term – shall remain stable.