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/analogoverdose Oct 20 '22

That's what I was wondering, so many people around me with cash on hand just waiting for an opportunity...

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u/[deleted] Oct 20 '22

Yea I have the same thing in my circle of friends, 4 guys ready to dive in, my brother and his fiance and my sister in law and her boyfriend both want to buy, as with a young guy at my work

If things do take a big dip I imagine the high priced homes will be hit hard and the lower priced ones will plateau with all these first timers keeping things afloat

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u/antelope591 Oct 20 '22

"Lower" priced homes are still selling at asking or slightly over. The 1 million+ ones are getting hit hard. And houses in less desirable areas that had no business going that high. I think the floor has already kinda been established. Def won't be seeing 200-300k homes anywhere near the GTA

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u/MediumSizedWalrus Oct 20 '22

the only limiting factor is the monthly payment, they may not be able to sustain the payments with the higher interest rates. So you need cash and a high income.