Could we see the fixed rates fall, again?

The 5-year government bond yield has dropped over 30basis points from the 21-month high it set a few weeks ago.

As of this writing, the 5-year yield is at 2.88%. That’s 20 bps below its level on April 26 (the date RBC led the industry higher with a 15 bps hike in fixed rates).

Chart watchers now expect the yield to head down towards support. Support is around the 2.75-2.80% mark, which is a long-term level where there have been multiple turns in yield direction.

5-year-bond-yield

Since fixed mortgage rates are linked to bond yields, we could see discounted fixed rates fall somewhat in the very near future.

Source: Canadian Mortgage Trends

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