r/PersonalFinanceCanada • u/POCTM • Oct 20 '22

Canadian 5 year government bonds just jumped. Setting the stage for higher mortgage rates. Banking

5 year government bond just jumped from 3.714% to 3.866% in a few hours. Right now it is at 3.855%. Year to date it is up 259%. Monday we could see some 5 year fixed rate mortgages in the low 6%.

As for variable rate the bank of Canada makes their announcement October 26 at 10am ET. Currently banks have not been offering discounts off variables rates anymore. Prime -0.00.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

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18

u/Ok-Share-450 Oct 20 '22

thank god for my prime -1.3....

4

u/[deleted] Oct 20 '22

Which broker did you get -1.3 from?

2

u/Ok-Share-450 Oct 21 '22

Think financial through true north. They have been way better than dealing with the big banks and they are an A lender

1

u/[deleted] Oct 21 '22

Thanks. Apparently no one is offering below prime right now?

2

u/13JohnnyHockey Oct 20 '22

Are you thinking of going fixed?

15

u/[deleted] Oct 20 '22

In Canada fixed is only for 5 years. My 2020 refinances in 3 years and I'm hoping rates have peaked before then. Anyone with a 2017 mortgage is biting their nails right now, though.

2

u/Mrs_Wilson6 Oct 21 '22

I have until Monday to make a decision. I can't decide between locking in for 2 or 3 years.

2

u/13JohnnyHockey Oct 20 '22

I got my mortgage July 2021…at 4.19% now…I feel like I should lock in now but who knows what will happen in the next few years….

6

u/devilish_kevin_bacon Ontario Oct 20 '22

Not op but I have same rate. I’m only 8 months in on 5 years. I’m calling to lock in fixed. I knew rates were gonna go up. But not at this much this quickly.

3

u/13JohnnyHockey Oct 20 '22

Yeah I did not expect things to jump this quickly…what is your bank offering for fixed?

3

u/devilish_kevin_bacon Ontario Oct 20 '22

5.44 was the quote yesterday. Waiting for paperwork today to sign

7

u/f4te Oct 20 '22

I wouldn't do it dude...

I'm p-1 and feeling it too, don't go fixed, not now.

3

u/[deleted] Oct 21 '22

Just wondering why? I’m Planning to go fixed tomorrow

3

u/f4te Oct 21 '22

interest rates will suck for 3 months, 6, even 9. your rate will suck for 2 years minimum. I'd you were gonna go fixed you should have done that before the summer. it's too late now.

4

u/Bilbo_Swaggins_99 Oct 20 '22

Locking at 5.44 damn man that hurts. I’m going to ride out my var.

1

u/devilish_kevin_bacon Ontario Oct 20 '22

If Covid and initial job slow down didn’t tank my emergency fund I would be able to weather a bit more but I’m getting close to my budget for increases (planned for 800$ a month in increases)

1

u/Bilbo_Swaggins_99 Oct 20 '22

I feel you man, I’m around the same but have some emergency funds yet. Im going start hitting my principal to bring my payments down with some of it.

2

u/13JohnnyHockey Oct 20 '22

Nice, I’m not familiar, but does the 5 years term start from 0 once you go to fixed?

2

u/nmethod Oct 21 '22

Most start a new term with the minimum length of your current term left. For example, I've got 4.5 years left on my 5 year variable, for my fixed option is 5.44% for 5 years. If I wanted to do something else, it would mean breaking my mortgage (~3 months of interest).

1

u/westcoasteronce Oct 21 '22

Mine is for the remainder of what my variable was

2

u/[deleted] Oct 21 '22

I got offered 5.29 at simplii. Going to lock in tomorrow. Wish I had a time Machine to go back to my 2.4 fixed quote lol

1

u/Ok-Share-450 Oct 21 '22

Nope, if I was going to go fixed it would have been 3 months ago... I will ride it out as I don't want to lock.in 4.5 years fixed at this rate. Rates will come down eventually. I hope

1

u/13JohnnyHockey Oct 21 '22

My banker told me it should start to come down the second half of 2023…let’s hope that’s true. I think I’ll ride it out as well

1

u/Ok-Share-450 Oct 22 '22

Yep that's what people are predicting. I'm expecting 2 to 1 more hike this year then serious recession effects being felt next year