Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
Call Us: 416-930-1225

canadian-5-yr-bond-yield-Sept-2014-2-years
canadian-5-yr-bond-yield-Sept-2014
We all know that the market is very volatile right now. Among all those volatilities there are certain indicators those are pointing towards a rate rebound. The short term interest rates like variable rates will go up in 2015 according to RBC Financial Market Forecasts. It has been also predicted in that report that the five years bond yields will also go up by the end of 2015.

Interestingly the rate of increase will be higher for the bonds compared to the overnight lending rate.

After the latest Bank of Canada interest rate announcement Toronto Dominion Bank’s economists forecast that there will be no short-term interest rate hike until the third quarter of 2015.

Regardless of what the economists think – the five years bond yield have been consistently above 1.5% mark for the last two years. It is not likely that the rate will drop any further in recent future.

  • Variable rate discounts are at their historical lows.
  • Five-year fixed interest rate didn’t change much for the last three years.
  • Short-term fixed rates dropped.

So what is the take from all these? If we add inflation trend to the equation then the possible outcome may be a fixed rate hike by the middle of 2015.

Last but not the least, we never know.