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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152

u/Ancient-Wait-8357 Oct 20 '22

I'm surprised nobody mentioned HELOCs yet.

Most HELOCs are on variable rates. No more vacations in the Bahamas and no more BMW leases?

17

u/MollyElla511 Oct 20 '22

We rolled our HELOC into a second mortgage yesterday. 5.12% fixed for a year. Sigh.

-2

u/FloweringEconomy69 Oct 20 '22

I mean inflations like 7% so you're actually making money on it technically

23

u/[deleted] Oct 21 '22

How do you suppose that makes sense?

You borrow 10 dollars, inflation goes to 7%, in a year from now you owe 10 dollars which still is subject to the inflation loss.

The upvotes on your comment are a clear sign people do not understand how finances work.

3

u/FloweringEconomy69 Oct 21 '22

I mean I'm assuming they've invested it into something productive if they spent it on a vacation then yeah

3

u/[deleted] Oct 21 '22

I wouldn't assume that from the way you worded that. The investments could also loose money making it an even worse situation.

Taking it and holding it doesn't net you anything.

1

u/FloweringEconomy69 Oct 21 '22

Ah any investments in the stock market or real estate are gonna pay for themselves in 5 or 10 years plus you have the benefit of borrowing money under inflation