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Mortgages

Mortgage Rates Shift as Three-Year Fixed Terms Plummet

Strategic Insights

— 1 min read

Canada's mortgage market is witnessing a shift, with three-year fixed terms offering competitive rates not seen in five-year terms. According to Ron Butler, founder of Butler Mortgage in Toronto, lenders are now promoting three-year fixed rates at around 3.6 per cent, whereas five-year fixed rates have hovered in the low 4-per-cent range. This change is attributed to the three-year Canada bond yield's decline, whereas the Canada five-year bond has remained relatively stable. Daniel Vyner, a mortgage broker in Toronto, attributes the drop in three-year bond yields to market expectations of a near-future rate cut by the Bank of Canada.

Key Takeaways:

  • Three-year fixed mortgage rates are now competitive with five-year fixed rates in Canada, with rates around 3.6 per cent being offered by lenders.
  • The decline in three-year Canada bond yields is attributed to market expectations of a near-future rate cut by the Bank of Canada.
  • Five-year fixed mortgage rates remain stable, with rates in the low 4-per-cent range.
  • The Bank of Canada is anticipated to cut interest rates, with a 67-per-cent chance of a 25-basis-point rate cut on September 17.
  • Morgage rates are sourced by Ratehub.ca, a mortgage-rate comparison marketplace and mortgage brokerage.
  • Lenders are promoting three-year fixed rates as a result of the three-year Canada bond yield's movement.

Statistics:

  • 3.6 per cent: The current rate offered by lenders for three-year fixed mortgage terms.
  • 4 per cent: The rate range for five-year fixed mortgage terms.
  • 100 basis points: The number of basis points in a single percentage point.
  • 67 per cent: The chance of a 25-basis-point rate cut by the Bank of Canada on September 17.
  • September 17: The target date for the Bank of Canada's next interest-rate decision.

Sources:

  • Ron Butler, founder of Butler Mortgage in Toronto.
  • Daniel Vyner, mortgage broker in Toronto.
  • LSEG (as cited in the article).
  • Ratehub.ca (a mortgage-rate comparison marketplace and mortgage brokerage).

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