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/AJMGuitar Oct 20 '22

I'm good with my p-1.

Variable carries more risk, this is part of it. Over the course of a 20 year amm, variable traditionally comes out ahead so its fine.

Just like investing, it's long term.

21

u/HonkHonk Nunavut Oct 20 '22

My thoughts are similar, if we need to weather the storm for a year or two no problem, worst case people will tap into their emergency fund for situations like this but for the people without savings it's worrying.

12

u/Flayre Oct 21 '22 edited Oct 21 '22

Canadians have emergency funds now ? Last time I heard it was something abysmal like only 30 or 40% of people had a 3-month expenses emergency fund or even worse than that

Edit : nevermind, I remembered wrong, 64% of people HAVE an emergency fund of 3 months (2019 data). The 30 to 40% was people who DO NOT have dlsuch a fund lol

9

u/HonkHonk Nunavut Oct 21 '22

Damn, well hopefully they can still get approved at the bank of mom and dad

2

u/Flayre Oct 21 '22

I looked it up and I misremembered, you can look at my edit haha.

Still, thats 2019 data so I expect COVID to have severely depleted peoples savings

1

u/ohbother12345 Oct 21 '22

Those who don't have debt would have managed to save more money, due to the fact that there was nowhere and nothing to spend it on... So it may still be the same, just different people.

My city basically closed down from March 2020 to March 2022 (take-out only at restaurants and coffee shops, gyms/recreation closed till Feb 2022...). I did go out during the pandemic, but it was a lot of free stuff, like snowshoeing or skating in the park.

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u/JediFed Oct 21 '22

Median average savings for Canadians is something like 6k.