Variable-rate mortgage holders will be watching on Oct. 25 when the Bank of Canada meets to decide the fate of the overnight rate – which in turn will guide the prime rate and mortgage costs.Matt Rourke/The Associated Press
Insured Mortgage Rates Go for a Steep Ride
The lowest nationally advertised insured mortgage rates shot up this past week – alongside rates in the bond market. The moves were intense in some cases, including an eye-popping 30-basis-point uptick on the five-year fixed.
Uninsured rates were mostly unchanged, save for a 10-basis-point jump in the lowest four-year fixed rate. But uninsured pricing won’t be far behind if yields keep marching higher.
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For variable-rate holders, the next moment of truth is Oct. 25. That’s when the Bank of Canada meets to decide the fate of the overnight rate – which in turn will guide the prime rate.
The fear is that we get one more nasty inflation report before the BoC’s meeting. That now looks like a high probability based on oil prices and given how inflation is calculated. There’s a legit chance that a headline inflation number above 4 per cent could drive the bank to jack up rates again to restrain inflation expectations. Resurgent inflation expectations remain its most profound worry.
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Rates were sourced from the MortgageLogic.news Canadian Mortgage Rate Survey on Sept. 28, 2023. We include only providers who advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20 per cent down payment or switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1-million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.
Robert McLister is an interest rate analyst, mortgage strategist and editor of MortgageLogic.news. You can follow him on Twitter at @RobMcLister.
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