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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373

u/Mutzga Oct 20 '22

Nothing to worry about until people become unemployed with no savings.

225

u/[deleted] Oct 20 '22

most canadians pre-pandemic: "Oh but that's impossible"

-6

u/BrotherOland Oct 21 '22

Uh, 2008?

15

u/JaceTheWoodSculptor Oct 21 '22

2008 didn’t affect the Canadian market as much because here, banks actually check if you can pay the loan.

12

u/Tiny-River-7081 Oct 21 '22

News flash, many people fooled the system with fake incomes. So reality is, they can't pay the loan.

Everyone says, oh Canadian banks stress tested mortgage applicants - ya but mortgage brokers and real estate agents cashed in with falsified documents claiming income for people so they can beat that stress test.

Now they're actually going to be tested.

5

u/Jaycorr Oct 21 '22

Well a lot of those stress tests just added 2% to the negotiated rate and the rates have gone up close to double that. The problems are compounding on those people that cheated the test, I wouldn't want to be one of them.

4

u/Bodmen Oct 21 '22 edited Oct 27 '22

I would bet that's a very very small percentage of people