The waning year has seen a rate rollercoaster as historically-low fixed rates shot up before descending once again; and the expert panel assembled by RateSuperMarket.ca expects that slow descent to continue into the end of the year.
“We have seen a recent lowering of Canadian bond yields as a reaction to the Bank of Canada's desire to keep a stimulative policy in place longer than otherwise expected,” Dan Eisner of True North Mortgage said. “This downward pressure on mortgage rates will be somewhat offset by the regulator changes set in motion by the government which will have the effect of increasing the cost of mortgage lending for Canadian banks.”
For his part, Ron Butler of Verico Butler Mortgage expects the banks to drive rates down in a bid to compete for end-of-year business.
“In Canada, short term (one-and-two-year) rates are pushed back by the certainty of continued low Prime Rate status,” Butler said. “There has already been a drop in fixed rates in late October and I suspect slow downward pressure on fixed rates will continue in November as banks complete their fiscal years and look to compete actively on rates in their first quarters.”
The one dissenting voice was that of Dr. Ian Lee, director of the MBA program at Carleton University’s Sprott School of Business, who believes rates will remain steady for the next month.
“While the five-year Bank of Canada bond rate is up very slightly, the continued uncertainty – highlighted in the Bank of Canada Monetary Policy Report and the Governor's pessimistic musings concerning the Canadian economic outlook – while possibly intended to help nudge the Canadian dollar somewhat – nonetheless reminds everyone once again of the weakness of the recovery,” Lee said. “Moreover, demand for housing in the period leading to Christmas declines which should produce some downward pressure on the demand for five-year bonds.”
Unsurprisingly, the panel agreed variable rates will remain steady for the month ahead.