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Nichols Real Estate Group

Fixed Mortgage Rates Continue to Rise

2022 02 28 10 34 28

Fixed mortgage rates are once again on the rise after Canada’s 5-year bond yield reached a three-year high earlier this month.

Brokers and mortgage lenders, including the Big 6 banks, have been hiking fixed mortgage rates in recent weeks, bringing the average uninsured rate closer to the 3% mark.

“There’s a good chance uninsured 5-year fixed rates will all be above 3% by early March if the 5-year yield moves towards 2%, as expected,” rate analyst Rob McLister told CMT. “That said, rates could take a temporary detour if investors pour into bonds in the wake of a geopolitical crisis (i.e., Russia’s invasion of Ukraine).”

Just six months ago, uninsured 5-year fixed rates were averaging closer to 2.20%.

For every 10-bps of rate increase, the monthly payment for 5-year rates increases about $5 per $100,000 of mortgage debt, McLister noted.

In recent weeks, 5-year insured mortgage rates (those requiring less than 20% down payment) have been rising at a faster pace compared to uninsured rates, with the spread between the two narrowing to about 10 bps.

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