As inflation continues to soften, the Bank of Canada announced on Wednesday it would be holding its interest rate at 4.5 per cent for a second time in a row.
The bank announced no plans to cut rates in the near future but despite this, mortgage rates in Canada have been on a downward trend.
According to Ratehub.ca, the lowest five-year fixed rate mortgage available in Canada is 4.29 per cent, down from 4.59 per cent on March 1. The lowest five-year variable rate is available for 5.55 per cent, down from 6.10 per cent. Three-year fixed rates have also come down to 4.34 per cent, from 4.79 per cent at the start of March.
Part of this has to do with the fact that bond yields in Canada have fallen, a sign that the market is anticipating a rate cut on the horizon. James Laird, co-CEO of Ratehub.ca and president of CanWise Financial, says bond yields are “a key input” when it comes to determining mortgage rates.
On top of that, he says banks and lenders have started to offer more spring promotions as the weather gets warmer and the housing market starts to heats up.
“That’s when the lenders and banks start competing with each other more aggressively. That’s when you’ll see promotions and banks and lenders are willing to take thinner margins in order to win volume,” he told CTVNews.ca on Thursday over the phone. “So, a combination of lower economic costs to fund these mortgages plus spring promotions means rates have come down.”
SHOULD YOU GET A FIXED-RATE OR VARIABLE RATE MORTGAGE?
Jackie Porter, a certified financial planner and talent partner at Carte Wealth Management, notes that we also find ourselves in the rare situation where variable rates are more expensive than fixed rates.
“For the first time in a long time, fixed rates are actually lower than being in a variable rate mortgage, which is crazy. So that’s a really good indication that rates will come down,” she told CTVNews.ca in a phone interview on Thursday.
Canadians who are entering the housing market or about to renew their mortgage are currently faced with a dilemma: should they take a more expensive variable rate with the anticipation that interest rates will fall, or lock in a cheaper fixed rate?
“I’m having conversations with my clients, where they don’t want to take a five-year because they expect to see five-year rates come down in the near term. It’s just that we just don’t know what the near term really means when there’s so many different factors that we have to consider,” Porter said.
Laird said many consumers are taking a middle-ground approach: opting for a two- or three-year fixed rate mortgage. The rates on these mortgages are a little more expensive than a five-year fixed rate, but they offer more flexibility than five-year rates and are currently cheaper than variable rates.”
“The short term fixed rates are as popular now as they’ve ever been,” Laird said. “People are anticipating rates being lower in, say, two or three years, which is why they want the renewal to happen in two or three years as opposed to the traditional five-year fixed rate.”
It remains unclear if and when the Bank of Canada will lower interest rates. Bank of Canada Governor Tiff Macklem said rate cuts in the near future “don’t look like the most likely scenario to us,” and he didn’t rule out a possible rate hike to get inflation fully down to two per cent.
Meanwhile, economists say a rate cut could happen either by the end of this year or in early 2024, pointing to concerns over a possible mild recession on the horizon, as well as the fact that several banks in Europe and the U.S. have run into trouble. And even if a rate cut happens, its possible size is also unclear and could depend on whether we enter a deep or shallow recession.
“These are conversations I certainly am having with my clients and it’s a really important conversation for consumers to be having with their professional advisers to kind of get a sense of what their specific situation is,” Porter said. “It really kind of depends on their overall financial circumstances, what makes the best sense for them.”
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
