Fixed or Variable? To Be Determined …

The Bank of Canada (BoC) and the U.S Federal Reserve have both slashed interest rates in the wake of the economic disruption caused by the COVID-19 crisis. These actions have altered the trade offs of fixed- versus variable-rate mortgages. Variable mortgage rates should begin falling, but it isn’t clear how much of the BoC’s cuts will be passed on from lenders. Government of Canada bond yields should also decline, but it it’s uncertain whether fixed mortgage rates will drop along with them. Given how fluid and fast-changing the situation is, it is too soon to tell.

Key Takeaways:

  • Over the past seven days the spread of COVID-19 has intensified, and huge swaths of the global economy have now ground to a halt.
  • The BoC’s dramatic moves will likely cause a complete recalibration of the demand for Canadian mortgages.
  • The current situation is so fluid and fast-moving that any rate-based simulations could be out of date very quickly.

“While all of this was unfolding, oil prices fell through the floor, stock markets plunged further, and economists lined up their recession forecasts.”

Read more:


More Posts

no interest rate hikes

Independent Mortgage Planner

Who Should You Get Your Mortgage Through? Hi Everyone, this is Aleem Peermohamed – The Mortgage Specialist Vancouver BC. One of my existing clients, who

Four Reasons To Save Money

Four Reasons To Save Money It’s not rocket science -everyone should be saving money regardless of how much you are making. The concept of saving

Mortgage Check-Up?

Eight out of Ten Canadians make a trip to the doctor at least once a year to help ensure they remain physically healthy. But how

Send Us A Message

Scroll to Top