Money Matters Toronto

Canadian 5 yr bond yields +0.03bps to 2.68- Four weeks ago it was 2.45%. The spread, based on 5 yr fixed rate mortgage of 4.39%,  is at 1.71%.

Pressure on fixed 5 year: Up.
Financial Post – Markets

Lenders typically like to keep a spread of 1.80% to 2.00% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -0.03bps to 2.65- Four weeks ago it was 2.45%. The spread, based on 5 yr rate of 4.39%,  is at 1.74%.

Pressure on fixed 5 year: Down.
Financial Post – Markets

Lenders typically like to keep a spread of 1.80% to 2.00% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

As a mortgage broker in Toronto I receive calls from my clients and shoppers asking what to do in today’s market. After all, over the past 3 months alone mortgage rates have gone on a bit of a roller coaster ride.

I think variable is still the way to go. Here is why (DISCLAIMER: This is my opinion only. I am not offering financial advice. Everybody has different circumstances and mortgages are not one size fits all):

1. You will keep your mortgage payments low. The difference between the average variable rate in today market P+.50 (2.75%) and today’s average fixed rate mortgage (4.49%) is 1.74%. That translates into a difference of $231/month on a $250,000 mortgage amortized over 25 years.

2. If you are willing to pay the monthly payment of a fixed rate mortgage you can opt for the variable and take advantage of your ability to increase your monthly payment by 20%. All the extra money will go toward reducing the principal which will take months if not years off your mortgage and save you interest.
Continue reading Fixed Or Variable Rate Mortgage: What Should I Do?

Canadian 5 yr bond yields +.04bps to 2.41- Four weeks ago it was 2.74. The spread, based on 5 yr rate of 4.49%,  is at 2.08%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.04bps to 2.37- Four weeks ago it was 2.82. The spread, based on 5 yr rate of 4.49%,  is at 2.12%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

 A such there is pressure for fixed 5 year rates to be around 2.37 + 1.80= 4.17%

Canadian 5 yr bond yields -.00bps to 2.41- Four weeks ago it was 2.68. The spread, based on 5 yr rate of 4.49%,  is at 2.08%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.01bps to 2.41- Four weeks ago it was 2.41. The spread, based on 5 yr rate of 4.49%,  is at 2.08%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 year bond yields -.01bps to 2.48. Four weeks ago it was 2.51. The spread, based on 5 yr rate of 4.49%,  is at 2.01%.

Pressure on fixed 5 year: Down.

Financial Post – Market. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.03bps to 2.49- Four weeks ago it was 2.52. The spread, based on 5 yr rate of 4.49%,  is at 2.00%.

Pressure on fixed 5 year rate: down.

Financial Post – Market. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.01bps to 2.48- Four weeks ago it was 2.51. The spread, based on 5 year rate of 4.49%,  is at 2.01%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.