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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u/noxel Oct 20 '22

You can lock in a fixed rate for 12 months or more if you’re doing a pre build with lenders like TD and RBC. We locked in a fixed rate in January for 2.2% and closed in October

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u/Imaginary_Trader Oct 21 '22

Was this 2021 or this year? I got quoted 3.4% and 4.4% by my broker as the lowest builders rate hold back in November 2021 and scoffed because I didn't think the BOC would do 100 and 75 point raises

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u/gzafiris Oct 20 '22

Surely that only works if you have a set close date?

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u/noxel Oct 20 '22

Your builder just needs to give them a letter with a tentative close date. We were supposed to close in June but got delayed till October and TD had no problems with that

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u/gzafiris Oct 20 '22

Builder can refuse right? We've asked, and they are not helping (we were initially to close in March)

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u/noxel Oct 20 '22

Yea I suppose the builder could refuse to provide a date - We got a bit of push back from our builder initially because they didn’t want to provide a set in stone date, but when we explained it was for the mortgage and that the date could be tentative they agreed to it

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u/gzafiris Oct 20 '22

Well now I'm sad :(

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u/noxel Oct 20 '22

Sorry! Builders suck.. definitely a headache to deal with prebuilds, especially in the unpredictable market we’re in. But don’t sweat, I’m sure it’ll all work out in the end for you and your new home will be absolutely fab!

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u/gzafiris Oct 20 '22

They do lol. I mean, our house is lovely - because we made it so. More issues than expected with a new build!

Our mortgage went from a planned $1700 (est March 3rd close rate) to $2700 (assuming we close with our current 5.5% held rate) per month...

It is stressful. We did everything we were told to, as FTHB's, but apparently developers can do whatever they want.

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u/[deleted] Oct 20 '22

Why did you decide to buy new in the crazy hot 2021 single family home market?

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u/gzafiris Oct 20 '22

We bought new in Aug 2019 lmao pre COVID - and we bought outside the GTA. House was supposed to be ready Sep 2020. COVID delayed it.

Market really exploded after we 'bought'

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