The lowest fixed and variable mortgage rates in Canada for July 6, 2023

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Fixed rates rose again this week as the Canadian bond market followed U.S. yields. Canada’s exports rose dramatically, mainly because the North American economy refused to break down.

But rest assured, central banks will do everything they can to break it. That includes the Bank of Canada. Markets indicate a better chance of a walk on Wednesday than a coin flip.

Government intervention keeps mortgage defaults at a premium.

That brings the benchmark prime rate up to 7.2 percent, the highest since 2001.

I hear many stories of borrowers flipping and locking into five-year fixed rates. You’d hate to hear that given the odds we’re nearing the end of the rate cycle. Yes, if you’ve been reading this column, you know that I wrote the same thing in March about the market’s year-end decline. But cycles take time to break out, and markets never get the timing right. Finally, macroeconomic raters must be patient, and some borrowers cannot afford patience and risk. They just want the uncertainty to end.

For those who don’t want to bet on a lower price next year, three-year terms remain a popular deal. They also have more flexibility than a five-year fixed if rates drop, which means a smaller penalty for early withdrawals from their mortgages.

For well-qualified, risk-tolerant borrowers who are willing to bet that Canada’s yield curve and leading indicators are right about a recession, locking in for the long term poses more risk than mitigation. It is better if you avoid some period of more than three years.

Robert McAllister is an interest rate analyst, mortgage strategist and editor. MortgageLogic.news. You can follow him on Twitter. @RobMcLister.

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