Canada’s job market has stumbled for the second month in a row, with significant job losses and rising unemployment. This weak performance has significantly reduced the likelihood of an imminent interest rate hike by the Bank of Canada. Bond yields responded immediately by falling, which in turn eased the upward pressure on fixed mortgage rates.
Fixed mortgage rates had been climbing steadily over the past month, with costs rising by about 50 basis points since mid-September. The recent decline in bond yields provides a temporary reprieve for mortgage shoppers, who are now facing starting rates of 4.39% for a three-year fixed (insured), 4.59% for a three-year fixed (uninsured), 4.29% for a five-year fixed (insured), and 4.79% for a five-year fixed (uninsured). Variable rates remain lower, at 3.30% for a five-year insured and 3.64% for a five-year uninsured.
Most economists anticipate that the Bank of Canada will maintain its current rates in October, though the possibility of a rate hike in December remains due to persistent inflation driven by energy prices. Robert McLister, a mortgage strategist and interest rate analyst, highlights the importance of these developments for mortgage shoppers.