OMG! Mortgage Rates Rise Again!
October 11, 2024

Fixed mortgage rates are climbing unexpectedly! Learn why this shift is happening and how the Bank of Canada's Oct 23 decision could impact you.
OMG Mortgage Rates in Calgary are Increasing

In a surprising turn of events, fixed mortgage interest rates are climbing this week when we all expected them to go down! 🏡📈 What’s causing this shift, and how will it affect you? Join Josh Tagg from The Mortgages for Less Team at The Independent Mortgage Company as he unpacks the latest developments in the mortgage market.

We hope the video provided valuable insights into the current mortgage landscape. For those who prefer reading or want to revisit specific points, we’ve included the full transcript below. As always, we’re here to help—don’t hesitate to reach out with any questions!

Transcript:

Fixed Mortgage Interest Rates are climbing this week when rates were supposed to only be going down! Will the Bank of Canada actually do a half-percent drop on October 23rd?

Fixed mortgage rates are climbing right now primarily due to a very strong jobs report out of the U.S. Nearly double the expected number of jobs created was reported for September, which pushed the U.S. bond yields up, and in turn, Canada’s 5-year bond went up too. It has since calmed down a bit, but before that could happen, we saw a pretty quick 0.2% increase on 5-year fixed rate mortgages from several lenders.

A welcome surprise in the middle of that was ATB Financial dropping its 5-year fixed rate to 3.99%! Not sure if that will last or not, but we have it right now!

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And the Bank of Canada’s next rate announcement will be on October 23rd. Not long ago, it was widely expected that we would see a half-percent drop that day, and again in December.

However, now it is less certain. The stronger labour market data released this week makes the Bank of Canada’s decision in October a close call, but with upside inflation risks fading and demand still very weak, the Bank will want to bring interest rates to a more neutral stance relatively quickly.

Some of this “good” employment data is simply due to fewer young people quitting summer jobs because fewer actually got summer jobs. So it might not really be as good as it sounds on the surface!

GDP in September isn’t available yet, but after August’s zero change, September is looking to be a drop.

A lot of what causes inflation is expectations. When we think things will cost more in the future, we buy more now, which pushes prices up. Inflation expectations have fallen sharply and wage growth is easing—all of which points to lowering inflation. Inflation dropped to 2% in August, and there is a good chance that inflation comes in just under 2% for September!

Last week, the market expected a 35% chance of a half-percent drop. Now, after the Bank of Canada’s more recent Business Outlook Survey, the market is suggesting a bit more than a 50% chance of a half-percent drop.

Nothing is certain until it is done. We will have to wait and see. We still have not seen Canada’s September inflation report, and that will also impact the Bank’s decision which is less than two weeks away.

Stay tuned as I bring you more updates before the October 23rd announcement.

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