Just prior to the Bank of Canada’s rate announcement four industry leaders predicted where rates will go within the next 30-45 days, and a consensus was reached.
As part of RateSupermarket.ca’s expert panel
, both Dan Eisner
, president of True North Mortgage and Dr. Ian Lee, program director at Carleton University Will Dunning, CAAMP
’s chief economist, and Kelvin Mangaroo, president of RateSupermarket.ca came to a consensus that fixed rates will drop.
“Bond investors, encouraged by a lower-rate environment in response to plunging oil, clamoured post-announcement, driving yields to sub 0.7 per cent levels,” the panel wrote. “Combined with competitive pressures from the heating spring market, lenders are expected to work with the limited discounting room they have in order to capture market share.”
According to the panel, rates have remained competitive since the surprise overnight rate drop by the Bank of Canada in late January, with lenders discounting both fixed and variable rates.
And despite the fact that the Bank of Canada held its overnight rate at ¾ per cent this morning, the panel believes variable rates will see a drop in the next month as well.
“Canada's biggest lenders have yet to fully implement the 0.25 per cent discount prescribed by the Bank of Canada in January,” the panel wrote. “Regardless of whether the Bank cuts rates again in the short term, competitive factors could lead the "Big Five" to finally concede the remaining 10 basis points to borrowers.”