September 03, 2013 14:00 ET

September Fixed Mortgage Rates to Remain Steep as Bond Yields Climb

RateSupermarket.ca Expert Panel Points to Economic Policy Unease Among Global Investors

TORONTO, ONTARIO--(Marketwired - Sept. 3, 2013) - An autumn crispness may be creeping into the air but there's no cooldown anticipated for bond yields, the main driver of fixed mortgage rates. The new highs hit during the month of August are anticipated to continue throughout September as investors react to a potential withdrawal of U.S. economic stimulus. This will prompt lenders to respond with a hike to their fixed rate offerings. Variable rates, however, are to remain unchanged as Canadian economic growth remains below the benchmarks required to raise interest rates.

Fixed Mortgage Rates: Up: Global bond investors continue to react negatively to the possibility of a quantitative easing scale back in the U.S. This has impacted Canadian bond yields in turn, which hit new highs in the month of August, and are not anticipated to moderate in the short term. This will prompt lenders to increase the price of their fixed mortgage rates.

Variable Mortgage Rates: Unchanged: Canadian economic growth remains slow, and inflation is not expected to hit the two per cent growth benchmark until 2014. It is not anticipated that the Bank of Canada will manipulate the current Overnight Lending Rate from one per cent, where it has remained since September 2010, and variable mortgage rates will remain where they are for the time being.

This month's panel members:

  • Ron Butler, Mortgage Broker, Verico Butler Mortgage
  • Dan Eisner, MBA. AMP. President, True North Mortgage
  • Kelvin Mangaroo, President, RateSupermarket.ca
  • Mary Zenar, Mortgage Broker, Zenar Financial

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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