December 03, 2013 11:00 ET

Historically Low Mortgage Rates: A Holiday Miracle?

RateSupermarket.ca Panel Finds New CMHC Risk Fees Won't Affect December Rates

TORONTO, ONTARIO--(Marketwired - Dec. 3, 2013) - It may be the off season for the housing market, but shoppers have good reason to turn their attention from the malls to their local real estate offerings; the cost of borrowing will remain historically cheap for the month of December. Despite the most recent round of measures implemented to cool demand, fixed rates will see slight discounting this month; bond yields remain low amid slow but stable economic improvement, both in Canada and internationally. However, such gains are still below growth benchmarks, leading to no change in the Bank of Canada's rate stance, and as a result, variable borrowing costs.

Fixed Mortgage Rates: Down: Government of Canada bond yields continue to see slight downward pressure, as investors remain confident that national benchmark rates will remain low. Market fluctuation as a result of U.S. monetary policy has also subsided, as the Fed appears to have deferred any changes to quantitative easing until the new year. As well, new government-imposed risk fees to the CMHC are not anticipated to have adverse effects on the availability of mortgage insurance in the near future. As a result, fixed mortgage rates will see slight discounting this month.

Variable Mortgage Rates: Unchanged: An increase to the Bank of Canada benchmark rate is not anticipated prior to late 2014, as sufficient slack remains in economic output to allow the rate to remain at its current one per cent.

This month's panel members:

  • Ron Butler, Mortgage Broker, Verico Butler Mortgage
  • Dan Eisner, MBA. AMP. President, True North Mortgage
  • Dr. Ian Lee, Program Director, Sprott School of Business, Carleton University
  • Kelvin Mangaroo, President, RateSupermarket.ca

Click here to read the full Mortgage Rate Outlook Panel.

About RateSupermarket.ca (www.ratesupermarket.ca)

Over 3 million Canadians have found their best rate for personal finance products on RateSupermarket.ca. Launched in 2008, RateSupermarket.ca is Canada's most comprehensive rate comparison site, offering visitors transparent access to the best mortgage rates as well as credit cards, bank accounts, insurance quotes and GIC rates.

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