Mortgage | Canadian Mortgage Rates Market Expected To Cool

February 8, 2012 – 1:33 am

TORONTO, ONTARIO–(Marketwire -02/07/12)- Recent fluctuations in variable and fixed mortgage rates have left Canadian consumers confused about future mortgage trends. The good news is that February should be less volatile, with RateSupermarket.ca ‘s Mortgage Rate Outlook Panel anticipating both fixed and variable mortgage rates will remain level during the month.

At the end of last year lenders reduced their discounts to prime which increased variable rate mortgages due to tightening margins. Last month they dropped fixed mortgage rates to record lows to kick off 2012 and develop their sales pipelines for the new year. So what’s in store for this month?

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Fixed mortgage rates : Unchanged

The big banks recently dropped their best mortgage rates for fixed 4 and 5 year terms to record lows, causing a frenzy in the market. Hyper competition to lock down market share early in the year has started to cool with most of the rate specials ending. Although, spreads between bond yields and current fixed rates still remain attractive (technically lenders have room to drop fixed rates even more!).

However, lenders are likely to practice caution given the continued uncertainty in the global economy and the escalating political and media pressure about low rates fuelling a housing bubble. As a result, our Panel members anticipate fixed mortgage rates will remain unchanged in the short term.

Variable mortgage rates : Unchanged

The next Bank of Canada rate announcement will take place

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