Lenders in holding pattern while everyone awaits spate of new data

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Government bond yields, which are driven by fixed mortgage rates, have risen 33 basis points in just a few weeks. Yet Canada’s most competitive mortgage lenders still have enough profit margins to justify lower fixed rates.

In the past week alone, we’ve seen the five most popular fixed rates announced nationwide drop in rates. The drops ranged from 2 to 14 basis points, depending on the term and whether the mortgage is secured or unsecured.

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But lenders’ fixed-rate margins are getting thin fast, so I don’t expect much improvement in interest rates unless Friday’s jobs report in Canada and the U.S. shows a significant deterioration in the employment picture.

Meanwhile, variable interest rates remain in a holding pattern, awaiting clarity on what the Bank of Canada will do next on interest rates. As we write, markets are pricing in a four-in-ten chance of another 25 basis point cut on July 24. But with so much economic data to come in between now and then, those numbers aren’t enough evidence.

Robert McAllister is a mortgage strategist, interest rate analyst and editor. Mortgage Logic NewsYou can follow him on X on @Rob McAllister.

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mortgage rates

The rates shown below are updated by the end of each day and are sourced from the Canadian Mortgage Rate Survey compiled by MortgageLogic.news. Postmedia and Imaginative. Online Inc., the parent company of MortgageLogic.news, receive compensation from some mortgage providers when you click on their links in the charts.

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