Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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The politicians in United States have reached a deal to end the latest political fiasco on the debt ceiling. (Somewhat like spouses quarrelling over whether to increase the limit on the credit card) As a result the fear of US default is pushed back till February 7th. Fitch is not comfortable with what is going on in US now and has put US debt under negative watch.

Canadian bond yield for five years goverment bonds. October 2013

The market is not too much worried about what Fitch says – it has resumed its ascent since the news of the debt deal came out. When stock market raises the bond market tumbles. No exception to that norm – Canadian bond prices are also showing weaknesses.

As a result – interest rates (fixed) will see the upward pressure. For now we should be okay because the lenders did not really offer any discount on the rates since all these US drama started to unfold. Therefore they will still have some room to absorb bit of a yield boom. You never know though.

So, if you have been hesitating – if to fix it now or later then think about it again.