Evaluate Canada’s best mortgage rates in one place. RATESDOTCA’s Rate Matrix lets you compare pricing for all key mortgage types and terms.
|Insured||80% LTV||65% LTV||Uninsured||Editor's Tips|
Most people are coming into 2021 with fresh optimism that the Corona-plague will be defeated, or at least significantly slowed. And with that optimism comes higher inflation expectations.
But inflation is not a near-term threat. We've got rough waters to navigate this quarter. Lockdowns will depress growth and keep the inflation outlook benign long past January. They might even motivate a "micro-cut" out of the Bank of Canada (i.e., a 10- to 15-basis-point rate cut).
That means variable rates like 0.99% (for default insured mortgages) and short-term fixed rates below 1.50% will continue dazzling mortgage shoppers this month.
For those needing fixed-rate financing in the next four months, there's no rush to get a rate hold -- at least not until you see Canada's 5-year government bond yield close above 0.55% to 0.60%. If/when that level is breached, the probability of higher fixed rates will meaningfully increase.
Bank of Canada Forecast: No overnight rate hikes until 2023 (Source: Bank of Canada)
Consensus Economist Forecast: No overnight rate hikes until the second half of 2022 (Source: Bloomberg)
Estimated Neutral Rate: 2.25% (That's two points higher than today. Note: this is where the overnight rate is projected to land long-term according to the Bank of Canada.)
5-year Fixed Rate in Five Years: 2.49% (This number represents Canada's current best uninsured 5-year fixed rate plus the projected increase in 5-year yields by Dec. 2025, as provided by Bloomberg)
Rates with exceptional value this month will look familiar:
The 5-year fixed (insured, insurable or uninsured)
The 1-year fixed (insured or insurable purchases and switches only)
The 5-year variable (insured purchases only)
Glossary: Insured: A mortgage that has customer-paid default insurance (typically purchases with less than a 20% down payment); Insurable: A mortgage that has lender-paid default insurance and 20% equity or more; Uninsured: A mortgage without default insurance (this includes all refinances, amortizations over 25 years, purchases of properties over $1 million, non-owner occupied rental properties and other mortgages not meeting default-insurance rules).
Most benchmark rates were little changed last month. These values are as of January 12, 2021:
*Lowest nationally available mortgage rates.
The economy remains fragile to say the least. Here are the main indicators worth watching: