Now don’t get me wrong – we are STILL in a period of historically low mortgage rates… but they are on the rise and we have been telling anyone that would listen that “it’s because of the bond market”.
Long story short – when bond yields go up, they rise because demand for the underlying bond is going down. So yields go up when bond prices fall, and bond prices fall because inflation is increasing (so that reduces the return of said bond). The recent rise in Canadian bonds is following the rise in U.S. bond yields. U.S. bonds are doing their thing because of the expected massive monetary and fiscal stimulus (under Biden), and with COVID vaccination rapidly climbing, the view of the economy is looking much brighter. This in turn has expectations that equities will continue to rise – and that eventually inflation will go up… so no one is interested in bonds.
So with mortgage rates on the rise, how long will you wait to take advantage so you’re not looking back with regret? EasyApproval.ca is here when you’re ready.