Canada's Fixed Mortgage Rates Surge Higher Amid Rising Bond Yields

The Bank of Canada held its key interest rate steady on Wednesday, but fixed-rate mortgages in Canada continue to rise. Despite this, the gap between fixed and variable mortgage rates is growing, with five-year fixed rates now around 4.09 per cent compared to a five-year variable rate of approximately 3.3 per cent.

The reason for this disparity lies in the bond market, where yields have been trending higher due to elevated oil and energy prices, as well as ongoing trade tensions between Canada and the US. This upward pressure on bond yields has caused fixed-rate mortgage interest rates to increase.

According to Jamie David, V-P of mortgages at Ratehub.ca, 'there is upward pressure at this moment,' which could lead to further increases in fixed-rate mortgage rates in the coming days.