Fixed rates have dropped significantly in the past couple of months. Mortgagors are looking at an average rate of 3.39% for a 5 year fixed, compared to the banks at 3.59%-3.69%. Once RBC lowered their rates by 10 points, all the other banks followed suit. This response of lowering rates was based off a decline in 5 year government bonds. That being said, rates are still not as low as they were this time last year. Average 5 year fixed last year was going for 2.89%. Longer term rates such as the 10 year have kept rising with no decrease in sight since last year.
Due to high unemployment and decreasing trade numbers, the Canadian bond yields have cool down since last year. Rates are not expected to increase dramatically this year but eventually should go up again. The real estate market this year is predicted to be a busy one, especially in the city of Toronto.
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