BOND YIELD WARNING !!! What does that even mean ??? Does is matter ??? Let me explain the factors that affect: Fixed Mortgage Rates The main factor affecting fixed mortgage rates is Government of Canada bond yields. Fixed mortgage rates typically move in alignment with government bond yields of the same term. Fixed Mortgage Rate: a fixed rate enables you to “lock in” a predetermined rate for a set period of time, or the term, with the most popular fixed term being 5 years.
For example, if the Government of Canada’s 5-year bond yield increases, the 5-year fixed mortgage rate would normally increase as well. There are some periods where they may not move directly in sync with each other, but this is the general trend. Have you been noticing the bond yields lately….they were up again yesterday. Don’t be surprised if you continue to see lenders increase rates.